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Nine questions to ask before seeking financial advice

I’m thinking about going down the financial planner path. What should I know before I make an appointment to see a planner?

If you’re in money chaos, it’s a good idea to establish goals and then draw up a plan yourself or go to an expert. The new financial year is an ideal time to start.

The information that financial planners need to draw a relevant plan includes your age, present and future income, daily and future expenses, assets and liabilities, dependents, the amount of tax you pay, superannuation, insurance and your health situation.

Once they’re laid out, you can seriously start looking at realistic goals for your wealth building.

In terms of what you should keep top of mind, you must know the risks of any investment, remembering greater returns bring bigger risks. The tax implications are important too. Make sure you do not let any issue in the plan remain a mystery – it might come back to haunt you. The Financial Planning Association has a free booklet called ‘Understanding risk to achieve your financial goals’, which can help with your goal setting.

Along the way you’ll need to consider the following questions:

  1. How much income do you need to live?
  2. How much can you save?
  3. Will you need extra money for a significant purchase?
  4. How secure are you in your job?
  5. How much money can you do without, without cramping your lifestyle?
  6. Are your investment goals short or long term?
  7. How old are you?
  8. What tax are you up for?
  9. Are you a thrill-seeker or a nervous Nelly?

Finally, make sure you ask your financial planner if they rebate any commissions they receive to you. Some do and others don’t. Find out exactly how much you’ll be charged and how much might be paid to the adviser by financial institutions for them putting your money with them. These commissions can influence their decisions.

Also ask your financial planner if they recommend industry super funds. Many won’t because these funds don’t pay commissions to advisers.

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: Thursday, July 29, 2010

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