The Value of Financial Advice
The average person doesn’t know what a Financial Adviser does. We often get asked these types of questions:
“How are you different to an accountant?”
“Can you lodge my tax return for me as well?”
“Can you sort out the refinance on my home?”
So, what do Financial Advisers do?
First and foremost, we provide recommendations to give you a greater sense of clarity, confidence, and strategic direction to work toward your financial goals. This may encompass recommendations around structuring your assets and cash flow, planning for retirement and maximising your superannuation, accumulating wealth through investment, protecting your family and assets with insurance or quality estate planning, planning for aged care or succession or sale of your business. While we don’t provide tax advice, working alongside your accountant, we can factor in some tax (financial) planning into our recommendations. We will work with your other professionals to make sure your estate plans, tax planning and financial plan are all on the same page.
Financial Advisers are a relatively new profession compared to other professions like Medical Doctors or Lawyers. In the last 30 years, especially since the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (2017), there have been large-scale changes to our industry. We’ve gone from being insurance salespeople with no formal qualifications, to a professional industry with a code of ethics, fiduciary responsibility to our clients, and no conflicted remuneration.
Now as Financial Advisers, we are expected to provide financial advice with our client’s best interests in mind, demonstrating how our advice puts our clients in a better financial and otherwise position. This additional level of regulation and compliance has been great in many ways, especially for the consumer. However, the accessibility of financial advice to the average consumer has decreased as the cost of providing advice (adviser registration, staffing costs, production of statements of advice) has increased.
The Value of Advice
If you are going to spend thousands of dollars, not hundreds, on financial advice, you want to know that you’re getting quality advice and value for money.
The CPA Value of Advice Research Report (2022) states “the benefit of properly implemented professional advice can be equivalent to up to 30.6 per cent of an individual’s total personal income per year, on average.”. This is even higher for individuals in the 15-34 age bracket with an average of 43.6%.
While our advice documents always outline the financial benefits of receiving advice, they don’t always highlight the intangible benefits of having an ongoing professional relationship with a Financial Adviser.
For example, the CPA Value of Advice Research Report (2022) demonstrates that 47.7% of advised people report better mental health, 32.7% report better family life, 18.6% report higher work satisfaction, 17.6% report better physical health and 24.7% report a better social life. Along with that, comes reported increases in peace of mind, a sense of control, financial security and freedom from worries and financial stress.
We act as a trusted sounding board for processing your big decisions. We educate you about complex financial concepts to empower you to understand your situation better. We help you maximise what you have by making smart and informed choices and avoiding emotion-led mistakes. We keep you accountable in your progress toward your financial and lifestyle goals. We keep an eye out for anything you might be missing.
So where to from here?
If you’re on the fence about whether it’s the right time to receive advice, whether you can afford to pay or whether the benefit is really in it for you, give us a call. We offer an obligation-free 15-minute initial chat which allows you to get to know us. From there you can figure out whether financial advice is for you before you commit to anything further.
By Georgia Alexander – Provisional Financial Adviser
