A good financial advisor

Hi,

We currently have some super invested with CFS, through Commonwealth Bank. It has been invested since 2017, and lost money the first year, and gained this year. It's a medium risk option and is averaging around 4%, which isn't all that much.

We would like to speak to a financial advisor to see if there are smarter super options. Is it better to speak to an independent financial advisor, as opposed to an advisor that is through a Bank/Super fund? We are located in Melbourne.

Thanks.

 

Deffo an independent financial advisor but even before that you need to educate yourself on all the options out there. If you haven't already then pickup a book on basic approaches to investing and money management. Something like the Barefoot investor is a good start.

If you rather not do any of that then look for independent financial advisors and take it from there.

PS: The most commonly recommended funds around here are AustralianSuper, Hostplus, Sunsuper etc. Lots of good industry super funds out there.
Best performing super funds over 1 financial year (to June 2018)

 

Hi,

Thanks for your reply.

The Super fund is actually my mum's (she's in her early 60s). She has $500K in it, but aside from her home, she has nothing else. She was hoping to live off the interest, but the interest isn't so great, nor is it consistent.

Unfortunately, I know nothing about investing (my background is in science), but I have read that AustralianSuper may be a better option for her. I thought it would be worth discussing it with a financial advisor.

I will purchase the book you mentioned -thank you.

What is the difference between investing in an industry super fund and seeking the advice of an independent financial advisor? Does the independent advisor just recommend an industry super fund? Or do they invest your money in property, shares etc themselves?

 

An industry fund is generally regarded as a better option because of low fees and for-the-benefit-of-the-member nature of it.

In this case she definitely needs sound financial and structuring advice. @Terry_w is a structuring wizard, he may be able to recommend some planners as well. Get in touch with him.

 

All sorts of financial advisors exists. Everything from quick reviews to investing the money on your behalf. Whether that is a good thing or not depends on many things but nothing beats self education in financial matters and get help as needed instead of trusting an "advisor" will somehow outperform basic and sound money management techniques.

 

For a start, there is no need for your mum to restrict her income to the interest. The whole point of super is to provide for retirement, so a gradual draw-down of capital is appropriate.
Marg

 

You need to differentiate between whether you want someone who is going to work out a financial strategy based on the circumstances or someone who is going to be able to pick investments.

A Financial Adviser may come up with a great strategy that saves you tax and can make funds last longer through utilising various legislation to your advantage. But if the only thing you're looking at is the performance number, you'll miss out on seeing the benefits they offer and think they are no good.

Conversely, you may find a stock broker who picks some awesome stocks and makes great returns, but if structured incorrectly, you might end up paying more tax than required and you end up at the same point.

 

Sign up for the Barefoot investors online newsletter. Study for up to a year then get your money back under his 12 months guarantee
The Barefoot Investor - Scott Pape

Just $397. Cancel anytime, for any reason — 100% money-back guarantee for first-time members if you change your mind in the next 365 days.

 

Thank you -I will do.

 

She will draw-down gradually (she is not a big spender but she loves to travel), but it does need to last her the rest of her life and I'm hoping it's going to be a very long one.

 

Ok, thank you, I understand. I will look into it further and get plenty of advice.

 

I just purchased the book, but thank you, I will keep this option in mind.

 

Just remember that as your mum draws down her super, the age pension will kick in when she reaches the qualifying assets/income levels.
Marg

 

Yes, great point.

 

I'm pleased to hear that. I will do plenty more research. Thanks for sharing.