The value that you will derive from financial planning is as unique as you are. No two financial plans are the same. Below are ways financial planning might be of value to you.
Get to where you’re going sooner
Our ‘busy parent’ clients typically want to upgrade the family home, repay the home loan as soon as possible, provide private school education opportunities to the kids, have regular holidays, live a comfortable lifestyle and hopefully make work optional by age 60 or sooner.
How much you spend on your lifestyle has a massive impact on whether you achieve all or any of these goals in the time frame you want. Our Strategic (financial) Plans show you what you need to do, what sacrifices may need to be made to get the things you want, when you want.
Through our Strategy Analysis service we also show what strategies from our Financial Strategy Checklist can be utilised, how much value they add and when they should be implemented.
Having a plan like this in place not only increases the probability of success, it increases the chances you’ll get to where you want to be sooner.
Stop you from making mistakes
The most common mistake we see clients make is getting tempted into taking unnecessary risks.
Examples include investing into investment ‘opportunities’ that have a low reward compared to the risk involved, property developments or it could be as simple as wanting to have a higher than necessary exposure to growth assets (shares and property).
Clients with more than $1.5 million in their investment portfolio and superannuation (so not including the value of the personal residence) are at most risk of this because the cost of a bad decision is much higher due to the sum of money involved.
This isn’t to say we don’t advise you to take some risk – it just has to make sense based on your situation and what you want to achieve with your money. Having an independent, objective sounding board is something we all need in life.
You will feel empowered
If you don’t understand our advice, you won’t implement. So educating and empowering you with the right information is an essential part of the role we play in your life.
We work hard to simplify complex issues such as cash-flow strategies, pensions, super, tax and all things boring in finance. It is important that you engage a financial planner who can bring boring subjects to life by breaking them down into bite size pieces and being creative with how they deliver their advice. We are very active in using colourful charts, videos and the whiteboard in meetings to keep you engaged in the process and motivated to get things done.
It may save your marriage
Finances remain the leading cause of divorce. Studies show that approximately 65% of couples argue about money on a regular basis.
This is one of the key reasons why we insist that you both attend the first meeting (Strategy Consultation) because we need to understand what is important about money to both of you. What is of just as much value is hearing each others answers to our questions. Often our clients are surprised by what they hear or get a deeper understanding of why something is of great importance.
Another key part of the Strategy Consultation is our goal setting session. Creating tangible financial goals together is fun, exciting, motivating and will strengthen your relationship.
Someone once said “A couple that plans their future together, has a future together” which in our view makes a lot of sense.
You will pay less tax
A number of the strategies on our Financial Strategy Checklist once implemented will reduce your personal tax bill.
Everyone would prefer to pay less tax, but saving tax should never be the reason why you are implementing a particular strategy. Not only is it illegal to do something just to save tax, the greater danger is hidden in the detail.
For example, salary sacrificing to superannuation will reduce your personal tax and help you create long term wealth, however it will leave you with less cash-flow to repay the home loan or fund holidays or education.
A geared investment property could provide tax benefits but now might not be the right time to do it.
Business owners can create an investment company and trusts to distribute profits to, but it may also mean the bank won’t lend you money to upgrade the house if you haven’t got proof of distributed earnings.
There are many strategies that can reduce tax however these strategies must be implemented at the right time. If not executed properly, it can end up costing you more than the tax savings which is a waste of time, energy and resources.
You can spend more on your lifestyle now, or later (or possibly both)
How much you spend on travel, eating out, clothing, cars and everything else beyond the essentials has a massive impact on how your wealth grows up to retirement and how far it lasts in retirement.
Most of our clients do not know precisely how much they spend on their lifestyle and do not have the time or energy to analyse it. Part of our role is to show you where the boundaries of the path are and to help you strike a healthy balance between having fun now and fun later.
Through our Strategy Analysis service we can show you:
- How much you can afford to spend on your lifestyle now and still achieve all of your goals in the time frames you have set
- Where the boundaries of the path are
- The impact that making some small sacrifices now will make in the future (i.e. how sooner can you make work optional)
Benefit from other people’s experiences
Whilst no two financial plans are ever the same, there are similarities. Often you are faced with a range of options that someone else in a similar position to you has had to face.
This is where the value of an experienced financial planner comes into play. We are in a position to share which of those options other clients who were in a similar position selected, why they selected it and most importantly how each of the options made them feel.
Our clients have taught us about giving good advice by being witness to the situation and working through it with them. Often there are tough decisions to be made and being able to draw on a wealth of experience from clients, other trusted professionals and our fellow team members is a value many people aren’t aware of.
Our process will give you the confidence and energy to take action
Some people never gain control over their finances due to a number of reasons. The number of options available as to what to do with your money can be so complicated that it immobilizes people to the point where they continuously keep pushing the finances back into the “too hard” basket.
The value of our advice is in understanding your situation in great detail and slicing down the options to a handful which we educate and empower you to understand.
Sometimes the reason action isn’t taken is because we don’t know where to start. Goal setting is often the start of the process but a common hurdle is not knowing what is and isn’t possible. Writing down goals is all well and good to do but becomes confusing, so momentum is lost when you don’t know whether what is being written down is realistic in the first place.
The goal setting session we hold in the Strategy Consultation has a structure that makes the process easy and fun. We have the experience and knowledge (and courage for that matter) to tell you when your goals are too ambitious but also the ability to balance this with giving you the freedom to dream a little.
The questions we ask and the structure we apply has been created drawing on the experience of having written over a thousand independent financial plans over the past decade. The key point to this experience is the structure and the efficiency of it. We are able to move you from step to step through the financial planning process with greater efficiency than you can do yourself – and with far greater objectivity.
We know which sections can be skipped as they aren’t applicable and those that require special and detailed attention due to the significance of them based on your situation.
It will make you feel confident and at ease
Once you know what you need to do to get the things you want in life and how to do it, you will feel confident and/or at greater ease in life.
If not, we’re not adding value. We will know it and you will feel it. We only work with clients for whom we can add significant value. The first step to knowing if we can add value or not is to schedule a Strategy Consultation with one of our advisers.