Financial planning 101 - Engaging a professional

In this series of videos, I’m giving you my top 5 tips when working with financial professionals. My second tip is to work out what sort of financial professional you need, or if you need one at all. Financial planners provide different levels of service for their customers. This could be general advice that doesn’t take your situation into account right up to comprehensive financial advice tailored to your personal circumstances. When you’re looking at big lifestyle decisions, like retirement, it’s important to work out what sort of professional support may help. There are different stages in your life and investment history where having a financial plan in place may be of more value to you. If you’re just starting to invest small amounts, paying for comprehensive advice may not be as viable as when approaching retirement and managing your superannuation or considering estate planning. It’s also important to remember that the more comprehensive the service you get from the planner, the more it may cost. If you engage a professional, you'll likely pay for their services, but you want to get value for money. I like to think of it as a cost versus benefit. It’s important to know what you’re paying for, and what you’re getting in return. If costs are your concern, then there are cheaper alternatives. With automated financial advice available online, you can access investment products at a much cheaper rate. Just remember that there are limitations to online products and services. It’s unlikely you’ll get a targeted and personalised investment strategy aimed at you and your specific situation and needs. The less you engage financial professionals the cheaper it will be, but you’ll need to do the work a professional would do if you wanted to achieve similar outcomes. In retirement, it comes down to effort. How much work, research and decision making do you want to do for your retirement versus how much you’re prepared to pay someone else to do it for you? Do you have access to current and accurate investment information? Is saving those dollars worth the hours of extra work? There’s no right or wrong answer to that question. It’s about enjoying your retirement to the fullest and understanding what retirement will look like with the financial resources you’ll have available. Check out my next video in the series where I’ll talk about what it means to try before you buy.