Why do I need a financial adviser?
Simplistically, a good financial adviser will help you set your financial goals and create a plan to achieve them. But there is more to this than a simple statement.
Depending on your goals and personal circumstances, there are different types of financial advice options available, and various things you should consider when choosing and working with a financial adviser. And it’s not for those contemplating retirement, although that is very important. Financial planning advice may be more valuable at age 25 than it is at 50 plus.
Financial planning is about lifestyle – OnTrack Wealth will work with you to set out how you want to live now and into the future – we will guide you and set you on a path to securing your future. A start may be as simple as getting out of debt. The earlier you get started, the further you’re likely to go.
And most importantly, we believe in protecting your most important asset – your ability to earn an income. If you insure nothing else, at least insure your income. Read about income protection insurance here.
Please also take a brief moment to review this 90 second video on The Value of Financial Advice.
How do I pay for the services provided?
Our Financial Services Guide (FSG) sets out how fees are applied under our Provision of Advice.
Do I need a minimum amount of money?
No. Sometimes our advice may be simply to switch your investment strategy within your existing superannuation fund. Or an Investment Plan outside of super can start with as little as $1,000, Plus $100 pm. Or maybe you need insurances – in which case payments could be made through your superannuation fund.
All I want is some extra insurance to protect my family. Why so many questions.
Please look at this short, 90 second video.
Do you strongly promote any one company’s products?
No. Synchron is a non-aligned AFS Licensee. We are proud to be Financial Planners who charge on a fee for service basis. We are not affiliated with any bank and we do not accept bonus payments from any financial product provider. Our motivation is simply to help you fulfill your financial goals and we will always recommend the most suitable product for each client
What written advice do you provide?
Once you decide to proceed with us, OnTrack Wealth will provide a written Statement of Advice (SOA) . This will include details of your current financial position, your risk profile, your financial goals and lifestyle objectives. The SOA will detail a recommended strategy as well as alternative strategies on how to achieve your goals and objectives with any supporting documentation relevant so you can clearly understand why we have given the advice.
Will my plan be reviewed?
Regular reviews of your financial plan are highly recommended to ensure it is as effective as possible and that you stay on track. Your Financial Planner may amend your plan at each review to reflect changes in the economy, legislation, and your personal circumstances.
How often should my plan be reviewed?
Your Financial Planner will recommend review periods according to the complexity of your financial strategy and your ever-changing personal circumstances. For example, if you are nearing retirement, it is best to meet more regularly, than if you are just starting out in a career. Reviews will include a written record of the progress of your investments along with any recommended changes to your strategy.
What is a Self Managed Super Fund (SMSF)?
Many people have many questions when it comes to preparing for retirement including having a spouse account, co contribution, investment choice as well as diversification. Thorough financial advice from a financial planner will help to explain these choices and better prepare the individual for their retirement. Using a financial planner to assist you with a SMSF, can ensure you have the lifestyle you desire when you reach the end of your working career and are ready to enjoy a leisurely life.
The trend in Australia to use DIY super is growing as the understanding and clarity increases. A SMSF works essentially the same, by investing contributions and making the funds available to members in retirement. One of the major differences is that members of the self-managed super fund are also the trustees controlling the investments and payments. Additionally, all members are trustees, no more than four members are permitted, a trust deed that meets specific requirements is employed as well as other special requirements.
A self-managed super fund can be quite time-consuming and is most beneficial when there is a minimum of about $200,000 in the fund. A personal super should not neglect other important issues including life and health insurance. There are additional layers of fees and costs including superannuation levy, accounting fees, auditor fees, and ASIC fees should the Trustee be an incorporated body.
OnTrack Wealth is presently not authorized to provide advice on SMSFs but can refer you to an appropriate Advisor should you wish to pursue this further.
What is Term Life Insurance?
A life insurance policy pays a lump sum amount in the event of the insured’s death to a beneficiary, third party or an estate. This amount can then be used for things such as children’s education, debts and funeral expenses as well as ongoing income for the beneficiary. Term Life Insurance may also be affected within a superannuation structure.
What is Total and Permanent Disability (TPD) Insurance
Total and Permanent Disability (TPD) provides a lump sum payment in the event of total disablement. TPD Insurance may be acquired inside or outside of a superannuation structure. It may be purchased as a standalone policy or in conjunction with a Term Life Insurance or Trauma Insurance policy. Policy holders may be able to choose an ‘any occupation’ or ‘own occupation’ definition.
To meet this definition, you must be unable to work in your usual occupation or any other occupation for which you are reasonably suited as a result of your education, experience or training.
To meet this definition, you must be unable to work in your own occupation.
What is Income Protection Insurance?
Income protection covers up to 75% (some companies 80%) of an insured’s income (net of business expenses) and provides a monthly benefit (up to age 70) if the insured is unable to work as a result of an illness or accident. You may also be able to include an additional benefit to cover superannuation contributions. The premiums when paid are tax deductive. The benefits when paid are taxable.
What are some general Inclusions in Insurance Policies?
The policy will continue to be renewed (as long as premiums are continued to be paid) under the same terms and conditions regardless of any changes in health, occupation or pastimes.
To ensure that the value of benefits keep up with the cost of living, benefit amounts will be automatically increased each year on the annual review date in line with increases in the CPI (often limited to 3% per year).
Partial Disability benefits
A partial disability benefit may be payable until the expiration of the benefit period, where you are able to return to work to perform all the duties of your occupation but only at a reduced capacity, earning an income less that your pre-disability income.
Should I pay for my insurance inside or outside superannuation?
- Life insurance through super is more manageable and easier on your cashflow
- No medical examinations may be needed
- Super policies often include both TPD and income protection insurance
- Super insurance may be cheaper than life insurance with other insurers
- There can be tax benefits to holding life insurance in super
- The amount of life insurance cover may not be sufficient for your needs
- Trauma Insurance is not available through super funds
- You may not be able to guarantee who the beneficiary will be
- The life insurance payout may be delayed
- There could be tax implications for death benefits
- Income protection policies don’t last for long – often as little as two years – what if you still can’t work after that
- The money paid for premiums reduces your retirement benefits
Insurance is certainly an area where you need the expert knowledge and assistance of a financial adviser. After all, who wants to pay for something this is not suited for their needs.