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Opinion – The importance of a financial adviser

Home National Opinion – The importance of a financial adviser
Opinion – The importance of  a financial adviser

You deserve an adviser

If you are ill, you go to the doctor, if you need legal assistance you use a lawyer and if a water pipe burst you call a plumber. We seek out experts for important decisions because that is their job – to have the knowledge that we do not. And yet when it comes to our money there seems to be a nervousness in getting financial advice from a financial advice expert.

Evidence proves that professional financial planning can potentially lead to better decisions, more money, less financial risk, less stress, more leisure time at your disposal, and a happier life over time. One of the myths that prevents people from making the most of their money and planning a bright financial future, is that they do not earn enough to afford or deserve advice from professionals, let alone assistance from a financial adviser. The banks teach us that a private banker is only for the wealthy, but in insurance that is far from reality.

Starting point

Before you plan your journey, you need to know where you are and what your current situation is. This is also referred to as your need’s analysis. What do you need to do financially to reach your end goal over the short and long-term? Through defining these goals, you effectively understand your finances and what steps to take to reach your goals and aspirations.

The value proposition that a financial adviser provides to customers includes a full financial needs analysis and an estate liquidity exercise to determine what the correct levels of cover (life insurance, income protection, critical illness etc.) are along with the appropriate premium patterns. It is not an easy task if you are not familiar with the product, and as an individual, it would be tricky figuring out which financial solution is best for your needs. 

Financial advisers do not only offer you advice about a single area of finances. Instead, they take the time to understand what you need and want to achieve, what your priorities are and how your existing assets or income can help you meet these goals. Financial advisers has the necessary tools and skills matched to a process that can guide you and actualise dreams you may have previously thought were out of reach. 

The six core financial aspects that financial advisers can assist with, and that you need to consider are financial planning, investment planning, retirement planning, business assurance, risk management and estate planning. 

The advantages of a financial adviser:

• They are registered and qualified financial professionals;

• They are trained and have experience in understanding each customer’s needs, whether individual or business insurance;

• They are trained and accredited to understand risk, savings, and investment solutions;

• They follow an advice process, make recommendations, and implement financial solutions;

• They can help build a legacy that will secure the future of your loved ones after you have passed;

• They are equipped to understand short, medium, and long-term investment products and services;

• They are well-informed about tax laws and the impact these can have on financial planning.

It is often the adviser fees that a customer focuses on that deter people from seeking financial advice. But, without considering the value delivered, it is impossible to calculate whether the cost of financial advice is worth it. The cost of financial advice varies hugely between different advisers and the complexity of your financial arrangements. 

Financial planning is about acting today to build a better future. Delaying a decision can increase the risk of not achieving your financial goals. Other consequences may include:

• Missed opportunity to leave a legacy – Tax and inheritance laws are increasingly complex, and the best solution for other individuals may not be what is best for you and your family. Documenting your financial priorities, such as paying for children’s education, or enhancing the amount you can pass to your heirs following your death, can help you choose the right path towards achieving your long-term goals.

• Taking on more, unintended risks – When life happens, your family is financially exposed in the unfortunate event of severe illness or disability. 

• Having an investment strategy that is not aligned to your goals – A good financial plan helps you understand your current financial situation in relation to the goals you are trying to achieve. Only with this knowledge can you begin to identify an investment strategy to help you get to where you want to go.

• Working longer that you need to – You likely have an ideal retirement age in mind, but could you be in a position to lower that retirement age by a few years and still achieve your retirement goals? The only way to know exactly where you stand on the path toward retirement is to have a financial plan that can help you get there.

When you choose to work with a Financial Adviser, it is important to find a professional with a passion in financial planning, who is the right fit for you, and has the right resources and experience. Contact your financial adviser today to plan for a better future.