Mythbusters: Do I need a Financial Adviser?

— 8 min read

Financial advisers are only for those of us lucky enough to have so much money that we do not know what to do with it, right?

You couldn’t be more wrong!

A good financial adviser will review your current financial position and work with you to understand the interdependent relationship between your goals, behaviours and financial circumstances.

They will ensure you appreciate the risks in your plan and understand the alternative options available to assist you in making informed financial decisions.

They will then help you develop, implement and maintain a comprehensive, long-term financial plan to ensure you have a clearly defined strategy to achieve your vision and goals.

Why should I consider a financial adviser?

1.  I need help defining my financial goals and priorities.

Financial advisers are skilled in helping you define your financial goals, values and aspirations in the short, medium and long term. For example, some couples find having this discussion a worthwhile investment of their time as they come to the realisation that they are (or are not) on the same page when it comes what they want to achieve financially.

2.  I’m not 100% convinced whether my financial goals are realistic and achievable.

Once your goals, values and aspirations are defined, it is important to understand whether they are realistic and achievable or not, given current/future financial resources and consideration of the time you have left until your income stops at retirement age.

Financial plans are not developed to be completed tomorrow. Clients’ goals, such as saving for retirement or sending their children to private school, may take years to accomplish.

3.  I’m unsure of my current financial plan and how it could be improved.

Once you know your direction and how long it will take to get there, a financial adviser can help you understand your overall financial picture and expose any inefficiencies in your current plan.
The parameters of a comprehensive financial plan are defined by your needs and objectives, but may include advice relating to savings and investments; cash flow and debt management, planning for retirement, education or a property purchase.

4.  It’s all a bit too abstract for me, I have no way of measuring progress towards my financial goals.

The best financial plans never involve a ‘set and forget’ strategy. Changes in the economy, legislation and investment markets, in addition to your personal circumstances mean your financial plan is ever evolving.

Evaluating progress towards your financial goals is also critical. Developing measureable ‘stepping stones’ in your financial plans and conducting regular reviews ensures you are on the right track.

5.  I’m unsure how much risk I need, or am willing to take on with my investments.

Understanding your tolerance for risk is a key role performed by a financial adviser. Risk tolerance is not simply a profile calculation or an investment in shares, but an in-depth understanding of the amount of risk you are willing to take to achieve and protect your financial goals.

Ultimately you need to understand the level of risk you need to take and appreciate what happens if something goes wrong. This is called the ‘sleep at night’ test.

6.  I can’t keep track of my money! Where’s it all gone?

It is believed that people who engage financial advisers feel more in control of their financial affairs. They generally have a strong understanding of their cashflow and feel confident their hard work is being utilised to develop their financial position in alignment with their financial goals.

7.  There’s a lot of options out there, I’m unsure as to whether or not I’m focusing my money in the right places.

Should I make extra home loan repayments or contribute more to the tax-friendly Super environment? Do you consider financial options but not really understand the available opportunities and the associated pros and cons?

This is where your financial adviser can provide value. He or she will spend considerable time with you throughout your working life and beyond, educating you on your alternative financial options and the best course of action given your goals and financial circumstances.

8.  If I learned about it through research and educational posts, surely I could do this myself.

Whilst it may be possible to create and implement your own financial plan, individuals who engage a financial adviser save themselves time and energy researching and considering their best financial options for individual goals and circumstances.

DPM Financial Advisers are committed to ensuring your financial plan is correctly implemented and your future is safeguarded. As a result, you can focus on what matters the most to you, your career, business, family and have the peace of mind that you’re financially on track to achieve your goals.

To find out more, get in touch on 1800 376 376 or request a free initial consultation.

* The information contained in this site is general and is not intended to serve as advice. DPM Financial Services Group recommends you obtain advice concerning specific matters before making a decision.

Authors

William Ezzy

B.Comm, MAppFin, CFP®

Consultant
Melbourne

Connect on LinkedIn

Will joined DPM in 2016. More than 10 years’ experience in the Financial Services industry has allowed him to work closely with a varied client base. Will specialises in developing long term wealth management plans, tailoring ongoing strategies to ensure his clients are in the best financial position to achieve their goals.