Key Takeaways
- Significant Asset Growth: Investors who receive professional advice over a period of four to six years accumulate up to 60% more assets than those who do not.
- Behavioural Volatility Shield: Long-term advice relationships prevent panic selling during market lows, ensuring investors stay committed to their strategies during downturns.
- Tax Deductibility of Fees: The cost of financial advice is often tax-deductible in Australia when it relates to managing income-producing investments.
- Immediate Cash Flow Improvements: Professional planning identifies wastage in personal budgets, such as unused memberships and high-interest debt, to free up capital.
- Reduced Government Reliance: Households with a robust financial plan maintain higher liquidity reserves and are less dependent on government support over time.
Seeking financial advice may initially come with a cost, but the long-term benefits can make a significant impact on your financial wellbeing. According to many studies, investors who received advice over four to six years accumulated 60% more assets compared to those who did not seek advice.
We know that a household with a robust long-term financial planning strategy would be more likely to have liquidity reserves, accumulated assets, an understanding of market behaviour, and less reliance on government support. These factors provide major advantages in terms of overall wellbeing.
Understanding the Value of Professional Guidance
Let’s compare some common expenses:
- Real estate agents commissions can be as high as 2.2% of the selling price.
- Do you have a cleaner? Three hours a week add up to over $3000 annually.
- Legal fees when navigating divorce start at $10,000.
- Have you got a gym membership that you are not utilising? That is at least a $1500 annual cost.
- Do you get your hair coloured? We all know how much that process costs.
Life is undeniably expensive. Instead of focusing on the costs, let's consider the benefits of a comprehensive investment strategy.
Five Ways a Financial Plan Benefits Your Life
Here is how a financial plan can make a difference:
- Stop wastage: Let's start by making the most of what you have right now. We will help you with budgeting and managing your debts effectively.
- Navigate volatility: Emerging research finds that those in long-term advice relationships are better prepared financially and behaviourally. They are more likely to ride out the storm and avoid selling assets at market lows.
- Investment strategy: Building a passive income stream for your future is essential. We will guide you in creating a strategy that aligns with your specific goals.
- Retirement strategy: Superannuation advice and retirement planning are crucial. We will help you map out the steps needed to secure your desired income.
- Tax minimisation: We will work alongside your Accountant to ensure you benefit from tax strategies and deductions.
What is the Cost of Financial Advice?
All these sound great, but how much will it cost you? Initial advice can range from $2000 to $4000 as the preparation is greater. However, the annual costs are much lower once a plan is implemented. In most cases, the advice is tax deductible too. It is well worth the effort.
Contact us for a free, no obligation meeting with one of our Financial Planners.
Kylie Harding is an Investment Adviser who believes in free access to information about building financial literacy. This has the potential to empower women and inspire economies. Contact Kylie today at [email protected] or 02 9998 4206.
Frequently Asked Questions
Is financial advice tax deductible in Australia?
Yes. Fees paid for financial advice are generally tax-deductible if the advice relates to producing assessable income. This includes advice on your current investment portfolio. Fees for initial advice that creates a new plan are typically not deductible, but ongoing management fees often are.
How much does a financial plan cost?
A comprehensive initial financial plan usually costs between $2000 and $4000. This fee covers the deep research, strategy development, and documentation required to set up your roadmap. Once the plan is active, ongoing service fees are generally lower.
Do people with financial advisers have more money?
Research shows that advised investors accumulate significantly more wealth over time. On average, those who work with an adviser for four to six years see their assets grow by 60% more than those who manage their own finances.
How does a financial plan help during market volatility?
A financial plan provides a clear strategy that prevents emotional decision-making. Investors with professional guidance are less likely to sell during market downturns. This allows them to benefit from the eventual recovery rather than locking in losses.
What is included in a professional investment strategy?
A professional strategy includes asset allocation, risk management, and tax optimisation. It also looks at your cash flow and debt levels to ensure you are building wealth in the most efficient way possible.
Kylie Harding is an Investment Adviser who believes in free access to information about building financial literacy at every stage in life has the potential to empower women and inspire economies.
Contact Kylie today on [email protected] or 02 9998 4206.
