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Investment advice can assist

Investment advice is a way of ensuring your money works for you. Advice in this area can mean the difference between a good investment decision and one you may regret down the track.

Investing in shares can be a risky business as the global financial crisis has shown. Investing in property can be tough too. A good financial planner can assist you in setting up a plan for your investment needs including a stock or property portfolio.

Investment advice can also assist you to salary sacrifice contributions in superannuation. This means that money is taxed at only the 15 per cent tax rate as opposed to at least 30 per cent if it were normal income subject to income tax. Be aware though that there are caps to the amount you can put in per year (and it changes depending on age) and that you won’t be able to access this money until at least age 60 (again depending on your current age).

Investment advice – find the advice that best suits you

Before signing on with a financial planner, it's important to ensure the planner offers the right type of advice for you. Be aware that a conflict of interest exists that may bias the recommendations of a financial planner. These conflicts of interest come about because of the way financial planners are employed and remunerated. If you speak with an adviser, it’s important ask how they are remunerated. This is because commissions are paid to advisers when they sell a product to clients. A financial planner may be influenced to recommend a particular product over another because it pays a higher commission, and not because it is in your best interests.

Also be aware of trailing commissions. There is much debate over industry super funds and non-industry super funds, or retail master trusts. Industry super funds don’t pay commissions to advisers and the fees are lower whereas retail master trusts do and generally the fees are higher. Many financial planners choose not to recommend industry super funds because they won't pay commissions.

Be careful of investment scams or get rich quick schemes – remember that if it sounds too good to be true, it probably is.

Achieve your financial goals

A financial planner can give you financial advice and create a financial plan to help you to kick money goals. The first thing to do is to write up a budget to see how much money you are spending each weekly, monthly and yearly. You can find many budget planners online, including at www.fido.gov.au.

Peter Switzer, founder of Switzer Financial Services, says in order to save money, you need to GST yourself. If you earn, say, $50,000, and you spend $30,000 per year, try and save 10 per cent of that, which is $3,000.

The money you save could then be invested in stocks, an investment property or superannuation. A financial planner, such as Switzer Financial Services, can assist with that investment advice.

For advice you can trust book a complimentary first appointment with Switzer Financial Services today.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Tuesday, June 29, 2010

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