Presented by: J Smith

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Presented by J Smith Date 22/08.09
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Seen the headlines?
Credit crunchRecession Rising
unemployment Its scary stuff concerns about
money matters arent limited to economic
downturns. 70 of Australians have experienced
financial difficulty at some point in their
lives.
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Good Advice is Money Well Spent
The decisions we make today will shape our lives
tomorrow. The global crisis will pass. The
economy will recover. Good professional advice
will leave a lasting legacy.
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Today well answer 5 key questions

• What does a financial planner do?
• How could I benefit from financial advice?
• How do I pay for advice?
• How will I recognise a qualified financial
  planner?
• How can I be sure good advice is money well
  spent?

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When you should seek financial advice
When to consider advice

• Your financial well being is important at every
  stage of life
• Good advice can help you meet lifes milestones
  - or manage lifes crises
• At every age we face challenges
• Saving for your first home
• Getting married or starting a family
• Investing for your childrens education
• Laying the foundations of wealth - irrespective
  of market conditions
• Coping with redundancy
• Planning for retirement
• Protecting what you have worked hard to achieve.

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When you should seek financial advice
Many of us share common goals
Would you like to be worth 1 million? Do you
want your family to enjoy financial security
whatever happens? Do you want to live mortgage
free? Would you like to trim the tax mans take?
How about a decent holiday every year? Want to
invest but unsure if now is the right time?
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How a financial planner can help
Only a financial planner is licensed to advise
you on
Setting financial goals Budgeting to meet your
goals Saving and investing through all types of
market conditions Protecting your family through
appropriate insurance Managing your
tax Planning for your retirement Making debt
work for you - not the other way
around Maximising your government entitlements
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What steps will your financial planner take?
A sensible, 6-step process

• A financial planner will follow a
  straightforward process to gain a thorough
  understanding of your needs and circumstances
• These insights shape the appropriate strategy to
  achieve your goals
• Gather financial information about you and your
  circumstances
• Identify your financial and lifestyle goals
• Identify any key financial issues
• Prepare a financial plan tailored to your needs
• Implement your plan
• Review and revise your plan at regular
  intervals, or if circumstances change

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Choosing the planner whos right for you
What to look for in your financial planner

• Generally a financial planner must hold an
  Australian Financial Services Licence issued by
  the Australian Securities and Investments
  Commission (ASIC), or be an authorised
  representative of a licensee.
• Licensing gives you more protection - check to
  see who is licensed at www.fido.asic.gov.au
• Choose a committed professional who is a member
  of the Financial Planning Association (FPA).

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Choosing the planner whos right for you
Other things to consider

• Look for a planner who is a CFP or CERTIFIED
  FINANCIAL PLANNER professional
• Ask a friend for a referral
• To find a member of the FPA in your area, visit
  the Find a Planner service at
  www.goodadvice.com.au or call 1300 626 393.

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Choosing the planner whos right for you
8 upfront questions to ask a prospective
financial planner
Tell me about your background and how long you
have been a financial planner? What are your
areas of specialisation and what kinds of clients
do you mostly see? Who is the ultimate owner of
your business? Can I see your Financial Services
Guide (FSG)? How do you charge for your
services? How will I know exactly what services
you will provide? Are you a member of the
Financial Planning Association? Are you a
CERTIFIED FINANCIAL PLANNER professional?
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How do you tell if you are getting good advice?
A simple checklist

• Good financial advice makes the most of your
  existing assets, protects your assets and helps
  you to build new assets.
• It provides financial security and delivers
  peace of mind.
• Good advice
• Puts your needs first
• Takes into account your personal situation and
  goals
• Is explained in a way that is clear and easy to
  understand
• Is set out both verbally and in writing (through
  a Statement of Advice)
• Clarifies any conflicts of interest which may
  influence the planners recommendations
• Clearly and openly identifies the costs you can
  expect to pay.

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Warning signs to look for
Is this advice right for you?

• Some warning signs of bad financial advice
• Your financial planner is not employed by and
  does not represent a licensed advisory
  business
• The financial planner does not take the time to
  identify your needs/goals
• The financial planner does not explain any
  complexities in a way that is clear and easy
  to understand
• The financial planner does not provide a
  Financial Services Guide at the first meeting
• The financial planner promotes a product without
  explaining the risks
• The cost of advice is hidden in the small print
  and not explained clearly or brushed aside
• You receive a phone call out of the blue from
  someone trying to sell advice or financial
  products including investments.

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Good Advice is Money Well Spent
How to pay for advice

• Financial planners charge for their services in
  a variety of ways
• Initial service fee the cost of strategic
  financial planning advice and should be agreed
  between you and your planner
• Ongoing service fee fee for ongoing service
  and should be separate from the initial service
• Commissions - paid to the financial planner by
  the providers of any financial products you
  choose.
• A combination of fees and commissions
• Its important that you are comfortable with the
  way youll pay for financial advice.
• Your planner should be open about fees

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Investing in your childrens future
The situation

• Meet the Thompsons - Bruce (34) and Jessica
  (36), plus their two young children
• Bruce works full time, Jessica works part-time.

The couples goals

• The family enjoys a strong household income but
• Bruce and Jessica wanted to enjoy financial
  security, and
• Be able to fund a private school education for
  their children.

Names changed to protect privacy.Case study
based on advice given by Philippa Elliott CFP, a
2006 and 2007 FPA Value of Advice Award winner
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Investing in your childrens future
3 phases

• The first step - protecting the family
• The couples planner recognised some key risks
• With no formal will, the couples children were
  vulnerable
• A formal risk protection plan, and a will was
  introduced to provide financial security
• Next - building wealth
• The couples salaries were pooled into one
  account.
• The couple were given advice on budgeting, and
  now live off a monthly spending allowance
• Remaining funds are invested for the childrens
  education
• Third - planning for retirement
• Bruce is building his super via salary sacrifice
  - cutting his tax rate from 23 to 13 while
  building his nest egg
• Jessica makes after-tax super contributions to
  access government co-contributions

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Investing in your childrens future
The value of advice to the Thompsons over 10 years
Bruce says In a world where time equals
money,our planner took time to really understand
our needs.
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A clear path through tough times
The situation

• Jim and Val Clark are in their 60s.
• Several years ago Jim was diagnosed with
  multiple sclerosis - he can no longer work
• Jim was covered by income protection insurance
  but was offered a single lump sum in lieu of
  his monthly payments

The couples goals

• To decide whether or not to accept the lump sum
  offer - a life-changing decision!
• To have a combined annual income in retirement
  of 62,000
• To meet the ongoing cost of Jims medical care

Names changed to protect privacy.Case study is
based on advice given by Jeremy Gillman-Wells
CFP, a 2007 FPA Value of Advice Award Winner
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A clear path through tough times

• The first step
• After crunching the numbers, Jim and Vals
  planner made a counter offer on the proposed
  insurance payout.
• This offer was accepted, increasing Jims payout
  by 46,000Next
• Their planner tapped into a tax-friendly
  invalidity component of the couples super that
  Jim and Val were unaware of.
• This payout was used to purchase low-tax private
  pensions
• A high-interest cash account was opened to
  provide funds for emergencies

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A clear path through tough times
The value of advice to the Jim and Val over 29
years
Jim and Val enjoy a combined tax-free annual
income of 68,300 - 5,000 more than they
anticipated
Definitely money well spent!
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Navigating a clear path through retirement
The situation
An inheritance posed a threat

• Despite being retirees, Ed (71) and Mary
  Walters (65), were still paying off their
  home plus an investment property.
• As pensioners, they were seriously strapped
  for cash
• The couple were continually dipping into their
  home loan to make ends meet
• A recipe for financial melt down!

• A 450,000 inheritance was a poisoned chalice
  - threatening to jeopardise their pension
  payments.

The couples goals

• To enjoy a decent retirement unburdened by
  debt
• To hold onto valuable Age Pension entitlements

Names changed to protect privacy.Case study is
based on advice given by Angela Jenkins CFP, a
2007 FPA Value of Advice Award Winner
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Navigating a clear path through retirement

• The first step
• The investment property was sold.
• Proceeds used to make a deductible contribution
  to super - wiping out a 40,000 tax bill on the
  propertys sale
• Next
• The couple were now able to pay off their debts
• Remaining funds were invested in two private
  pensions
• The couple are still able to claim the Age
  Pension
• A happy ending!
• Ed and Mary sold the family home and purchased
  their dream retirement property on the water

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Navigating a clear path through retirement
The value of advice to Edward and Mary over 21
years

• Ed and Mary now live on 50,000 tax-free -
  5,000 more than expected
• Their Age Pension payments are still in tact
• They are no longer burdened by an investment
  property requiring ongoing repairs

Mary says Its a great relief to be financially
secure and debt free.
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Good Advice is Money Well Spent
How will you benefit from good advice?

• Get back on track financially - budgeting,
  saving, investing
• Coping with redundancy - managing a lump sum
  payout/minimising tax
• Survive a separation
• Plan for the future
• Navigate a global crisis - set yourself up for
  the next boom.

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Good Advice is Money Well Spent
Where can you get good financial advice?

• Ask your local financial planner
• Call the Financial Planning Association
• Phone [phone]
• www.goodadvice.com.au

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Good Advice is Money Well Spent
Disclaimer

• Financial Planning Association of ABN 62 054 174
  453
• We are legally required to disclose the following
  disclaimer
• The information contained in this presentation
  (and accompanying material, if any) are of a
  general nature only. The presentation and any
  accompanying material has been prepared without
  taking into account your personal objectives,
  financial situation or individual needs.
• We recommend that you consult a suitably
  qualified financial planner before making any
  financial decision. A financial planner can
  prepare a tailored financial plan which takes
  into account your financial position, personal
  goals and requirements.
• The information contained in this presentation
  is prepared in good faith based on sources
  believed to be accurate. The FPA, its members,
  or any of the employees, agents, officers or
  directors do not give any warranty of
  reliability or accuracy, and, to the extent
  permitted by law, are not responsible for any
  errors or omissions (including those due to
  negligence) contained in the presentation.