Why do you need a financial adviser?
Financial Planning Insights
By Kent Lin
Superannuation is the greatest wealth creation policy Australia has ever developed. It means ordinary working Australians can afford a level of comfort in their retirement.
Unless you spend your working life in the superannuation industry, unlocking the opportunities in tax, superannuation, Centrelink and other regulations is virtually impossible.
… a lot of money gets left on the table ‘if you don’t know what you don’t know’.
For those with the ability to plan ahead, a sound financial plan coupled with regular contributions and great accounting support, can lead to enormous intergenerational wealth creation opportunities.
A financial adviser looks at your entire life-cycle. They consider your income – and protecting it via a range of insurances for you and your partner. They consider the most appropriate structure for you – which may be a Self-Managed Super Fund, or a retail super fund. They also consider your estate and planning for wealth transfer.
Very few people have the capacity to look at their own lives objectively. By seeking advice and guidance from those who can, you can build a plan to set yourself and even your children up financially. If it was easy, we would all do it.
There is an enormous range of strategies available to a competent financial adviser.
A family removes a $72,000 in tax liability…
Who knew that paying the 17% Death Benefits Tax is essentially ‘optional’. With professional guidance, I helped a family remove a potential $72,000 tax liability by transferring $300,000 from Dad to Mum’s superannuation. That’s an extra $36,000 each for the children – and no impact on the income.
Similarly, the structure of an SMSF can allow a family to effectively manage intergenerational wealth transfer, while cost-effectively building wealth and retirement incomes for hard-working families.
Planning for the unexpected…
Who knows what the cost of providing Home Care would be if a stay-at-home carer were to unexpectedly pass away – many of us might guess it to be $200,000 – but a financial adviser is likely to tell you they need a $1m insurance policy. That sounds like a lot, but the reason is that if the unthinkable were to happen, that money could be invested to earn $50,000 p.a. allowing the surviving partner to continue to work, whilst also allowing them to employ a nanny/cook/cleaner.
While we may not all be eligible for Income Protection cover, Trauma insurance may be an option to help out if an unfortunate health diagnosis is received. Being ill really limits your ability to contribute, but insurance can help take one significant worry away.
n an ideal world, we would not need a Financial Planner. However, the systems are complex to navigate and the competing pressures of tax, superannuation and Centrelink make it easy for you to miss opportunities that could make you better off financially, possibly saving you tens of thousands of dollars.
You don’t know what you don’t know!
