Financial Planning FAQs

Is it worth seeing a financial planner?

In 2020 IOOF completed research with thousands of advised Australians and one of the findings was “Measuring the benefit of financial advice”
This is an extract from that research paper:

This section draws comparison between the responses from advised client and unadvised individuals (across age, wealth and gender), in relation to retirement sentiment, ability to handle unexpected events and dealing with financial stressors

It clearly illustrates that advised clients responded more positively than unadvised individuals regardless of their age band, wealth category or gender.

Financial Planning Ballarat Advised clients vs unadvised individuals

An anecdote I like to use is taking your car to a mechanic.

Although you are able to do all the work on your car yourself, a mechanic is able to do it a lot quicker, has all the correct tools and knowledge to do it right the first time.

Financial planners may have access to some products cheaper than the general public but where the value really lies is in their systems and processes that is allowing them to compare products with almost everything on the market and implement the ones that are specific to your situation. As well as all the education and experience to back up their recommendations.

Like a mechanic, there is nothing we do that you can’t do yourself but it’s unlikely you will be able to produce the same quality outcome or have the time to do it.

There is a couple of different ways a financial planner can get paid, but these all have to be outlined in your Statement of Advice, which you must agree upon before anything is implemented. If your planner doesn’t disclose this be sure to ask them to.

The most common forms of remuneration for a financial planner are adviser fees (either paid directly from you or the investment under their management) and insurance commissions.

Insurance commissions are now universal and are also being reviewed by the governing bodies.

Yes and No. If the fees are paid from your pocket they are not tax deductible, but if the fees are funded from superannuation they are tax deductable.

What that means is you will never be able to claim the fees on your individual tax return, but if your fees are funded from superannuation, the superannuation fund is able to claim a tax rebate on these fees.

This a great question because the answer can surprise people. A common misconception is that you only need to see a planner when you are looking to retire, for help setting up account based pensions, apply for the commonwealth pension, etc. But the reality is planners can be assistance to almost everyone and in most cases the sooner the better.

If you see a planner at 18 who sets you up in the right superannuation fund, gets you leveled insurance, works out budgeting and savings plans you will set yourself well in front of the pack and save thousands throughout your working life.

If that same 18 year old stays engaged with their planner they can adjust this plan through all stages of their life to ensure they stay on track to achieve financial freedom as soon as possible.

First step is to meet one of our planners for what is called a fact find appointment. This is when you and the planner will go into depth about you, your situation, goals and objectives to not only ensure the planner can help you but also ensure you feel comfortable with that planner.

From there we will go away and get all the information we need from the 3rd parties, insurance, super, etc.

We will then produce a Statement of Advice to present to you to show you exactly what our advice is.

At that point if you are happy to proceed, we will work with you to implement the advice.

Initial consultation: $330 per hour

Advice preparation: If you elect to pay us a fee for advice the following fees will apply. The fees will depend on the size of the investment portfolio and the complexity of the advice:

The minimum fee charged is $3,300 while the maximum fee is $5,500.

For example, complex advice that contain multiple goals, strategies and/or tax structures including but not limited to; self-managed superannuation Funds, family trusts and companies, are likely to be charged closer to the maximum. Less complex advice that addresses limited goals, strategies and tax structures are likely to be charged closer to the minimum.

Implementation: If you elect to pay us a fee for implementing the advice, then the fees can range from $0 to $2,750.

Borrowed funds – if we recommend you acquire investments using borrowed funds then your implementation fee will be a minimum of $1,100 and a maximum of $2,750.

Client Service Agreement: You can elect to enter into a 12 month as part of your financial planning strategy so you can receive advice services such as a meeting to review your plan. Details of the services will be set out in your 12 month Client Service Agreement.

The fee can range from a minimum of $1,800 while the maximum is 9,500 or 1.10% of the value of your portfolio each year. The fee applied will be commensurate to the level of service needed and the complexity of the advice provided and will be outlined and agreed with you in the Agreement.

For example, for investments valued at $500,000 the maximum annual fee would be $5,500 pa.

Borrowed funds – if we recommend you acquire investments using borrowed funds then your annual fee will be a minimum of $1,800 and a maximum of $9,500 pa.

Ad hoc advice: Where you do not wish to participate in a 12 month Client Service Agreement but require ongoing advice on an ad hoc basis, an hourly fee of $330 per hour will apply.

Execution only service: Where we provide a financial service to facilitate buying or selling of a specific financial product as instructed by you, a one-off minimum of $165 and a maximum of $330 fee may apply.