A harsh reality we all must face at some point is that we are not as good at everything as we might think. This is a simple equation – our hours are limited, so we focus on the things we do best, or we enjoy the most, and we do the best we can at the rest. Unfortunately, “doing your best” when it comes to your personal finances doesn’t always lead to the best outcome, which is why having an experienced financial planner on your side can make a world of difference when to comes to hitting those financial goals…after that, that’s what they do best!
A Rice Warner report commissioned by the Financial Services Council confirms that people who use financial planning services amass up to 3.9 times more assets in 15 years than those who don’t. This happens because financial planning comes with many benefits that you would otherwise not enjoy. Here are the five of them:
1. Financial planning helps set goals for a better future.
Understanding your current financial situation is the first step to making any plan. Once you know where you’re standing, finding the right path forward becomes a lot easier.
With the help of a financial planner, you can:
- Discover the ins and outs of money (there are more than you think)
- Set ambitious but achievable financial goals
- Determine the best direction and decisions to take to reach them
Your dreams might seem far away – whether that’s clearing your debts or mortgage, buying a new car, boat or investment property, or retiring early – but they are achievable when you set goals for the short, medium, and long term. Instead of following a seemingly never-ending road with no sign-posts, you’ll be guided and supported every of the way. This gives structure to your life and prevents you from going off track.
2. Having a financial plan improves savings and compounding.
At least 21% of Australian households have less than $1,000 in savings, and many struggle to save money every year. This is primarily for lack of preparation and strategy.
Luckily, a financial plan can help anyone rack up those savings with the right approach. For example, a financial plan can help you be more disciplined with your spending, allowing you to save more money over time.
But it is not just about saving for savings’ sake. Having enough money can also help you compound faster. If you put that money in a superannuation account using voluntary contributions, you increase the compounding effect, allowing for a more comfortable and quicker retirement.
ALSO READ: The Importance of a Healthy Savings Habit
3. A financial plan fits your lifestyle and personal needs.
People make better decisions when they have freedom in their lives. Freedom, for most people, comes from having enough money to take risks and to do what they love.
A financial advisor will help you track your income and expenses to match your current financial situation, so you can live the life you want. This is called cash flow management, and it is an essential part of financial planning. When done right, it lets you boost your lifestyle without overdoing it. You’ll be living the life you want without falling into unnecessary debt.
ALSO READ: 4 Essential Tips in Wealth Management
4. It takes away stress and gives you peace of mind.
A study from ME Bank early this year found that 54% of Australians changed their financial goals in 2021, due to the financial impacts of COVID-19. Even for those who weren’t directly affected financially (e.g., through loss of income) the global pandemic caused them stress and uncertainty, which underscored the importance of having healthy financial habits; people with rainy day funds always weather unprecedented events better.
Having secure and stable financials is the best way to be prepared for undesirable situations. Even without emergencies and disasters, being wealthy gives you peace of mind.
With proper financial planning, you can reduce the anxiety and indecision that come from having no strategy. If the plane goes down, you’ll have a parachute to prevent you from going into free-fall.
5. Having a financial plan gives you better investment opportunities.
Managing your money confidently will give you the upper hand in life. But how can you make the most of your money if you don’t know where to put it?
With so many alternatives for investment, knowing what your best option is will be helpful. This takes some of the guesswork from investing, preventing you from taking unnecessary risks.
How to start a financial plan with Raeburn Advisors
At Raeburn Advisors, we take pride helping a variety of clients hit their unique goals and overcome financial hurdles through simplified, practical financial advice. We’re there for you every step of the way
Who benefits from financial planning?
Anyone who wants to improve their financial situation. Whether your goals are to reduce debt, make better investments, plan for retirement, or get the most from your existing assets, we help develop a tailored strategy to help you get organized, stay focused, and hit those goals.
What is the process of financial planning?
There are a few steps before we can give you a complete financial plan to follow. Here’s a brief overview of what to expect:
- We start with a free initial meeting where we cover all the costs. We will gauge your needs and demands. Then, we will help you decide whether we are the right fit for your situation.
- After the initial meeting, we build a risk profile, find all the ins and outs of your circumstances, and give you a breakdown of what you may need going forward.
- If everything goes well, you can decide whether you want our financial guidance. If yes, we will show you the applicable fees and costs of everything we can do for you.
- Once you hire us, we will prepare your tailored financial plan and send it for your approval. This normally takes a couple of weeks from our initial meeting.
- After you approve the strategy, we will help you implement everything we’ve outlined to reduce the burden on you. We will maintain communication to help you meet your goals and follow the strategy.
We do regular financial reviews and six month check-ins to make sure the strategy is still applicable and helping you meet your goals.
How much does financial planning cost?
We always cover the initial consultation costs – after our preliminary meeting we’ll have a better understanding of your situation and the complexities involved. From there we will tell you our recommended approach and a cost estimate on developing a tailored financial plan for you.
Typical tailored financial plans cost between $1,500 to $5,500 depending on complexity. With this you will get a strategy paper forecasting to show how you how much better off you will be with our advice. There’s no obligation to continue at this point. We are also flexible with our payment options to ensure that you get the best outcome. We work predominantly on a fee for service basis.
For more info, check out how we work.
Remember: We will never sell you a service that does not bring you a positive ROI – if we cannot provide value to equal or greater than the cost to you, we will let you know.
How to get started with financial planning
This information has been provided as general advice. We have not considered your financial circumstances, needs or objectives. You should consider the appropriateness of the advice. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication.