Wealth Management

Finding the right financial advisor for retirement planning

Tamim Marial

16 May 2024

6 min read

Are you among the many Aussies hesitant to seek financial advice for retirement planning? According to a recent report from the Australian Securities and Investments Commission, only 27% actively seek it out – but it's not that people undervalue the expertise of a financial advisor; it's the pressures of everyday expenses holding people back, and the misconception that financial advice is a luxury reserved for the wealthy.

In a world where the cost of living seems to skyrocket by the minute, investing in retirement planning advice might feel like an added strain on your budget. But here's the thing: the benefits far outweigh the immediate costs. Not seeking expert insights today could end up costing you much more in the future. This is especially true when it comes to securing your retirement. Studies consistently demonstrate tangible advantages—both in financial outcomes and emotional wellbeing—when individuals consult with experts for retirement planning.

In this article, we dive into the pivotal role of retirement planning and outline steps to find the right advisor for you.

Combating retirement anxiety

Retirement fears are on the rise among Australians. A growing portion of us are worried we won’t have enough savings for retirement, with a $200,000 gap between how much we expect to retire with versus what we think we’ll need. This concern is heightened by a lack of financial literacy and Australia's complex retirement income system.

Combatting retirement anxiety starts with proactive planning and seeking the right support. Instead of feeling overwhelmed by uncertainties, take control. By defining clear retirement goals, understanding your financial needs, and collaborating with trusted professionals, you can navigate the path to retirement with confidence. Remember, the key is not to tackle this journey alone—empower yourself with knowledge and expert guidance to build a secure and fulfilling retirement.

Defining your retirement goals and needs

Retirement planning experts, such as financial planners, can help you with different aspects of money management, from saving and investing to budgeting and spending. Some specialise in specific areas, such as investment management, while others offer a more comprehensive approach that takes a holistic view of your financial situation. Defining your needs will help you determine the type of financial advisor to approach.

Some factors to consider when establishing retirement goals include:

Assessing your current lifestyle: Your current lifestyle and expenses can serve as a baseline for estimating future needs. Evaluate your daily living costs, including housing, utilities, groceries, healthcare, entertainment, and transportation. This can help you understand your current financial position and identify areas where you need to adjust to increase your retirement savings.
Clarifying your ideal retirement lifestyle: Painting a picture of the kind of life you want will help determine how much you will need to fund it. Try to be realistic about your expectations and budget accordingly.
Understand the importance of time: Your current age and expected retirement age set the foundation for an effective retirement plan. As retirement approaches, you may consider a shift towards safer, more stable investments to protect your savings from market ups and downs. Finding the right balance that aligns with your comfort level for risk and financial objectives is crucial. Remember to adjust your portfolio over time as your retirement timeline changes to maintain this balance effectively.
Preparing your legacy: Consider your wishes for passing on assets to beneficiaries and work on developing a plan to facilitate smooth distribution. Part of the estate planning process includes tax planning. You need to weigh the tax implications of passing on assets and choose the most suitable and convenient plan.

One of the biggest challenges when defining retirement goals and needs is striking a balance between realistic return expectations and a desired lifestyle. The solution is to focus on creating a simple and flexible portfolio that can be regularly updated to reflect changing market conditions and retirement objectives.

How to find and weigh up retirement planning advice:

Check credentials and qualifications. Your financial advisor must hold an Australian Financial Services Licence (AFSL) or be authorised by an AFSL holder. Additionally, you should check the Financial Advisers Register to find out where a financial advisor has worked, their qualifications, training, memberships of professional bodies and products they can advise on. You can look for experts who possess relevant certifications, such as Certified Financial Planner (CFP). A Certified Financial Planner is a financial professional who has met rigorous educational and ethical standards set by the Financial Advice Association Australia (FAAA).
Experience and expertise. Solid training and experience are so important. But so is finding one who treats you with respect. Look for someone who not only has a solid track record of navigating retirement challenges but also treats you with the respect and attention you deserve. Enquire about their specific expertise to ensure they align with your unique needs and financial goals.
Fees. The cost of financial advice for retirement planning varies based on the services provided. Some charge hourly rates or flat fees, while others bill annual fees or a percentage of managed assets for ongoing advice and management. To make an informed decision, ask potential advisors to break down their fees and terms so you can select the arrangement that best fits your needs and budget.
Client reviews and testimonials. To get insights into an advisor's reputation, service quality, and satisfaction of their clients, look for client reviews and testimonials. These can be found on their website, social media pages, etc. You can also ask them for references.

In your quest for retirement planning advice, don’t underestimate the value of creating a checklist of the things you want in an advisor. This will make the process clearer and easier on your part. Before making a final decision, it's wise to meet with a potential advisor for an initial consultation to discuss your goals and assess how well you communicate and work together.

Working with Findex

At Findex, we're all about empowering our clients to craft their financial stories the way they envision them. We firmly believe that financial advice is about strengthening your financial standing and helping you achieve your aspirations.

Our wealth management services cover a range of key areas:

We work with you and your accountant to understand your needs, goals and objectives and deliver strategic advice to achieve your goals. We provide holistic advice through: