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Financial planning - expense or investment?

I recently went to a financial planner who did a good job creating a financial plan but he tried to talk me into ongoing service and I thought he was a little enthusiastic to get my business. What do you think of ongoing service?

One of the great problems with financial planning is that the original plan is not tax deductible, which seems odd given accounting services are.

However, ongoing service is tax deductible and for many people it can be a great option provided they are not under-serviced and over-charged.

If you have a self-managed super fund and your fees are a lot lower than going into a managed fund from a financial institution, then having an adviser help you with your investments makes sense.

If you are a chaotic type with money and you need a money coach or mentor, having someone help you make money decisions can be a real bonus.

A good adviser can also help answer questions about doing a budget, paying off your home loan quicker, thinking about salary sacrifice, assisting with home loans and thinking about tax matters you could take to an accountant.

They can also help decide if a rental property might be better than bumping up your super or vice versa.

On the other hand, some people who don’t have complex money matters might only need a one-off plan and occasionally might need to have a new one done as circumstances change.

Unfortunately each ‘new’ plan would not be tax deductible and the Federal Government should look at making financial plans more accessible.

Under current laws, a planner has to do anything between 10 to 15 hours work to get a plan right and that’s why even a cheap plan is $3000!

Given the work that needs to be done by law for an average person, $5,000 is a more likely price people should pay!

However, most people think spending a $100 a week on take-away food and restaurants or $5,200 for a year is more valuable than a plan that could both save and make you money.

We’re a weird mob, aren’t we?

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: Monday, January 18, 2010

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