Do I need a financial adviser to plan for retirement?


Studies show that people who seek financial advice are generally better off than those who don't. Here's what to expect from a financial adviser, why their services can be worth the cost, tips for choosing one you trust, and how they can help you create financial independence in retirement

Saving for retirement can be difficult because it seems far away, while obligations like supporting family members seem immediate. Sometimes, we need perspective to prioritise and secure our financial future. This is especially the case when planning for retirement, which is a long term goal that requires a holistic view of all your assets and needs.

Are financial advisers worth the money?

If you've ever felt uncertain while reading investment terms, take a little time now to get familiar with them. Below is a list of terms used in the industry when talking about retirement. We'll keep updating this list to help you stay informed.

Public opinion surveys have been done to determine whether financial advice is worth the cost. They show that:

  • Investors who get financial advice accumulate substantially more financial assets than their counterparts who did not get financial advice, regardless of age and income.
  • Investors who get financial advice judge their investment knowledge as better and improved.
  • Individuals who have received financial advice portray a higher level of financial confidence and peace of mind.

In a study titled Econometric Models on the Value of Advice of a Financial Adviser, researchers found that households assisted by a financial adviser accumulated 1.58 times as much wealth after four to six years as households who were not advised. After 15 years, the increased wealth accumulation effect grew to 2.73 times. The conclusion is: More often than not, it pays to have a trustworthy financial adviser.

Two key advantages of having a financial adviser

1. They can tailor a plan so you invest more effectively

Financial advisers and planners are regulated and are required to have extensive knowledge of the products they recommend. This is important because investment strategies vary widely depending on many factors, like how old you are, how many dependants you have, whether you want to retire early or whether you want to retire abroad.

An adviser would do a risk profile or financial needs analysis on you and draw up a tailored plan to help you improve your savings and investment behaviours. This includes selecting appropriate financial products, improving the tax efficiency of your savings, assisting with estate planning, and optimising your asset mix according to your circumstances and risk tolerance.

2. They can help counter emotional decision making

Financial Advisers keep abreast of information that affects your portfolio. This enables them to crunch the numbers on different scenarios and spell out pros and cons. Advisers can help you keep a cool head when markets are volatile, ensuring you don't make decisions which damage your financial outcomes down the line. This is referred to as behavioural coaching, which can have a massive impact on your finances,

Not only will context and guidance help you counter the behavioural biases that keep you from achieving your retirement goals, but being accountable to an adviser can also keep you disciplined in practising healthy financial behaviours. In short, consulting a trusted financial adviser could be one of the smartest decisions you make.

How do I find the right adviser for me?

Finding an adviser you trust to help make critical financial decisions with lifelong implications is an important task. This person will help you develop a healthy relationship with your money, so choose an adviser in the same way you'd choose a personal trainer or a marriage counsellor.

Look for someone who:

  • Is licenced. Only professionals who are registered with the Financial Sector Conduct Authority (FSCA) and are qualified to sell you specific financial products - having passed regulatory exams and undergone training. Check the FSCA website to ensure an adviser is registered to give advice
  • Communicates clearly and openly by using language you understand
  • Takes the time to understand you and your personal situation. You should feel comfortable expressing your hopes and fears, and asking questions if you're unsure of a recommendation.

These qualities can make all the difference in helping you find and stick to a retirement investment strategy that best suits you.

This article is not financial advice. Please consult with a financial adviser for financial advice.

Get the right help to reach your savings goals

The right financial adviser can help you make the most appropriate investment choices for your future. If you don't have a financial adviser, you can contact Discovery's call centre on 0860 67 57 77. Our code of conduct for financial advisers is strict and all advisers must avoid or disclose any conflicts of interests. At the core of everything they do is a pledge to treat clients fairly.

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We can help you play retirement catch up with our boosts

If you invest in our Retirement Annuity, you can get a boost of up to 20% to your lump sum investments and, if you live well by being healthy, driving safely and being responsible with your money, you can get rewarded with boosts of up to 15% to your monthly contributions.

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This document is meant only as information and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser. Discovery Life Investment Services Pty (Ltd): Registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. All life assurance products are underwritten by Discovery Life Ltd. Registration number: 1966/003901/06, a licensed life Insurer,an authorised financial service provider and registered credit provider, NCR Reg No. NCRCP3555. All boosts are offered through the insurer, Discovery Life Limited. The insurer reserves the right to review and change the qualifying requirements for boosts at any time. Product Rules, Terms and Conditions Apply

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