Why I use a financial planner

On 12 December 2017, I will have been working in the financial services sector for 50 years.

With all that experience you would think I had all the answers and didn’t need to use a financial planner. Some years ago I bit the bullet and decided I needed a financial planner.

I needed discipline. I needed someone who could guide me and make me accountable for the decisions I wanted to make. Like a sounding board – a counsellor.

Selecting a financial planner is not necessarily an easy process. I had specific needs.

I needed someone who could keep me on the straight and narrow, someone who would challenge me when it became necessary, and someone who experienced financial success in their own life. Not ‘in your face’ wealthy, but someone who was financially comfortable and had mastered their own work/life balance. Someone who practised what they preached.

They had to be younger than me, or someone who at least had a robust business succession plan in place – as I didn’t want a planner who would be retiring when my wife and I needed them most.

On top of all that, I needed to find someone my wife was comfortable to deal with, and someone who could guide her if there came a time when I was no longer around.

When looking for a financial planner, I didn’t need someone who could tell me about salary sacrificing into super, making spouse contributions, claiming the government low-income co-contribution, or even the benefits of commencing a transition to retirement pension.

What I needed was someone who could guide me on investment selection. What managed funds should I be using, what shares should I be buying, and the fixed interest and hybrid securities to consider?

A couple of weeks ago I met with my financial planner for our review.

Now, we didn’t need to discuss the investment returns as I keep on top of that through my online access to my account. We did discuss the state of the market and general concerns about the investment decisions that might need to be made in the coming weeks and months.

Most of the conversation revolved around what my wife and I wanted to do with our lives, rather than with our finances. Given my circumstances, the conversation naturally turned to our retirement plans.

When this question comes up, I either brush the question off or say something vague like ‘in a couple of years’. It is quite confronting and frankly, it is something I don’t really want to think about at this stage.

If I enjoy my work and my life, and if I am able to continue to deliver a quality service to my clients, then why should I have a fixed retirement date in mind? After our conversation, I felt liberated.

Having a financial planner who is willing to have some of the more awkward conversations is, to me, where the value lies in the relationship. They are a counsellor or coach first, and a financial planner second. To me, my financial planner is worth their weight in gold!


Source:  Peter Kelly | Centrepoint Alliance

When should you really start planning for my retirement?

Whether it is planning for retirement, buying a new home, deciding what school to send the kids to, what job to take, or where to go for holidays, there are simply numerous variables that need to be taken into account.

For many of us, retirement will last for 20 to 30 years, so getting it right becomes very important indeed.

The short and simple answer to the question posed is ‘as early as possible’. Retirement planning is something we should start to think about as soon as we start working.

I am not saying for one moment that retirement should be at front of mind for a 25-year-old, however a couple of simple steps put into action very early in working life, that form part of a ‘set and forget’ strategy, may be the difference between a bleak or a comfortable retirement.

Superannuation is the Government’s preferred retirement savings structure, and it provides for some very attractive tax benefits.

Employers currently contribute 9.5% of their employee’s salary to super and many employees think that is enough, particularly as this will increase to 12% over the coming years. But will that be enough?

I have always held the view that, coupled with the good and robust investment of superannuation savings, in a low-cost super fund, extra money should be contributed to super. And what is the magic number?

If someone were to have somewhere between 15% and 18% of their salary contributed to super over their entire working life, their accumulated super at retirement would have a significant impact on the type of lifestyle they can afford in retirement.


Source:  Peter Kelly | Centrepoint Alliance

Age Pension – don’t set and forget!

Applying for an age pension is not an easy task.

There is a comprehensive application form and depending on your circumstances, numerous documents that need to be photocopied and lodged as well.

If an application is successful and the age pension is granted, many age pensioners never want to deal with Centrelink again.

It is extremely important for age pensioner to remember they have a legal obligation to notify Centrelink, within a 14 day period, of any change in their circumstances or assets.

The following is not a full list of changes in circumstances but provides examples of events when a pensioner is required to notify to Centrelink;

  • buy or sell shares or managed investments
  • open new bank accounts
  • have combined assets of more than the amount currently being assessed
  • receive a lump sum amount or one-off payment, e.g. inheritance
  • move into or out of a nursing home, hostel or retirement village
  • are charged with an offence and placed in prison or admitted to a psychiatric institution
  • gift more than $10,000 worth of assets in an income year
  • changes their employment
  • travel overseas for a period of more than 6 weeks
  • marry, separate, divorce, or become widowed
  • rent or sell their home, or purchases another

Centrelink review the value of share and managed funds automatically twice a year, in March and September. However, to ensure an age pension is being assessed correctly, it is extremely important for pensioners to notify Centrelink if they buy new investments or sell investments to pay expenses, or to travel.

It is also important to remember that if you fail to notify Centrelink of changes in your circumstances and Centrelink discovers they have overpaid the pension, they will raise the overpayment from the date the change was effective. On the other hand, if Centrelink becomes aware of a person’s pension being underpaid because of a change which was not notified or notified late, they will only adjust the pension from the date they became aware of the change and not from when the change actually took effect.

So, what is the best way of keeping Centrelink informed? Going into the local Centrelink office, or speaking to someone on the phone can seem either too daunting or requires the patience of a saint.

The best place to start is to establish an online ‘myGov’ account and link your Centrelink account.


Source:  Mark Teale | Centrepoint Alliance

Aged Care Loans

Australia has an ageing population that will continue to grow significantly over the next 25 years. Approximately $3 billion per annum is already required to fund individuals moving into aged care facilities. The ability to fund entry to an aged care facility will become an important one for your customers.

Most individuals have to pay a Refundable Accommodation Deposit (RAD) commonly exceeding $500,000. How to fund this deposit can be difficult, stressful and most often at a time when a decision needs to be made quickly.

Click on the video below to see how an Aged Care Loan can help fund the RAD and also keep the family home. This flexible solution gives the breathing space to consider financial needs and decide what financial requirements will best suit the family.

Source: LaTrobe Financial

Retirement is not that simple!

Most people dream of the stress-free and simple life that retirement brings, however just how stress-free and simple will retirement be.

For most of us, by the time we retire, we would have dealt with all the stress, the high blood pressure and emotions that one would normally face over a period of 40 plus working years.  Regardless of the type of work you have performed – whether you were self-employed, a professional, a public servant, tradesperson, or a labourer – without a doubt you would have been confronted with many decisions and challenges work brings.

This level of work stress is compounded further by the ongoing issues of family life.

From having children and riding the bumps through the different stages of their lives to saving for a deposit to buy a home.

After you have survived this period of your life, retirement should be easy and certainly stress-free. You own your home and the last of the children have moved out and there is no longer a drain on your bank balance.

Life should now be simple…

Not quite as now you have a new set of things to worry about, like Do I have enough superannuation to keep me in the lifestyle I would like to achieve in retirement? Do I qualify for the age pension or the Commonwealth Seniors Health Card? What happens if I am not able to look after myself? Will I be able to afford care and the necessary medical assistance?

So what can a person do to try and reduce the level of stress in retirement?

A financial expert or adviser will understand the legislation and how much you will need in your retirement.  They can educate you not only during retirement but more importantly, they can help you take the correct steps before you reach retirement age.


Source:  Mark Teale | Centrepoint Alliance