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Areas of
Advice
Personal Insurance
Personal Insurance encompasses 4 different types
of cover; Term Life, Total and Permanent
Disability (TPD), Income Protection and Trauma
Cover. The level of underinsurance in Australia
is an enormous problem, with a large percentage
of the population relying on the automatic
insurance within their chosen Industry or
Employer Super Fund. In reality the level of
cover provided by such policies is only a
portion of what is really needed.
There are many misconceptions regarding personal
insurance and the reasons that people need the
cover. The most important function that the
cover provides is to ensure that the life
insured's income is protected, both now and in
the future, regardless of any health concerns
they might face.
It doesn't matter whether you have decided on a
regular savings plan or an investment in
property as part of your financial planning, if
you do not have adequate personal insurance in
place then you are risking failure for reasons
that are outside of your control.
Wealth Accumulation
A wealth accumulation plan is an essential part
of everyone's financial planning. Wealth
accumulation plans can include anything from a
regular savings plan, a salary sacrifice
arrangement or a large release of equity from a
property to fund an investment portfolio.
The strategy that suits you will depend on your
tolerance for risk and the objectives that you
are trying to achieve. The one thing that is the
same for everyone is that a well structured, tax
effective, wealth accumulation strategy is a
necessity. The most important role that a
Financial Adviser provides in this situation is
not the initial strategy recommendation, nor is
it the recommendation on which product to use,
it is having someone there who will make sure
that you stay on track with your plan. When
share markets take a tumble it is vital that you
stick to your plans and not sell down your
portfolio or perhaps you are feeling that your
money could be better spent somewhere other than
superannuation. It is your Financial Adviser
that will help you re-visit the initial
reasoning for establishing that strategy in the
first place.
Superannuation
Recent changes to superannuation now mean that
the majority of people who retire at age 60 and
draw an income from superannuation will be able
to do so tax free. For most people these changes
now mean that superannuation will be the focus
of their retirement planning.
Even with the importance that has now been
placed on superannuation, the level of
understanding amongst the general public as to
how superannuation actually works and what the
benefits are, is very low. When thinking about
your superannuation you should ask yourself the
following questions:
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Have I consolidated all of my superannuation
money into a single fund?
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What fees does that fund charge and are
those fees reflected in the level of service
they provide me with?
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Do I have any insurance inside my fund and
how much am I paying for it?
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How is my money invested?
If you cannot answer all of these questions then
you need to take a more active interest in your
super. At FIA Financial Planning we provide
comprehensive advice surrounding all
superannuation issues and strategies and would
be happy to answer any questions you might have.
Retirement Planning
If you are within 10 years of retiring it is
vital that you sit down, have a look at your
financial position and determine how you are
going to provide for yourself in retirement. You
need to be able to identify how much money you
want in retirement and how you plan on saving
enough to provide that income.
Many people believe that their property assets,
either their own home or an investment property,
will provide them with their retirement income.
For people aged over 60, and in fact for the
majority of people who are retiring, relying on
rental income or the sale of a property will
result in them being far worse off than if that
income was coming from a superannuation based
pension.
Considering that life expectancies for
males and females are now in the 80's you will
need an asset base large enough to provide you
with your desired level of income for 20 years+.
Having a structured set of steps to follow will
ensure that you have the required asset base
upon retirement and will see that you achieve
financial freedom in retirement.
Corporate / Employer Super
For people who run small to medium sized
businesses, an employer superannuation fund
could well be a valuable addition to their
business. If you run your own business then you
are probably aware of the administration burden
that is involved with paying your staff's
superannuation contributions. Particularly when
they have exercised their right to choose their
own superannuation fund. Having all of your
staff become members of your own employer
sponsored superannuation fund can build
efficiency into your payroll process.
The advantage for your staff is that they will
get access to discounted administration fees
within the fund and potentially Automatic
Acceptance Insurance (AAI). AAI is hugely
important for people who have struggled to get
personal insurance either inside another fund or
as a standalone policy outside of superannuation
due to their medical history.
If you run a business with more than 2 employees
it would be worthwhile giving us a call to see
whether a benefit could be derived from
establishing your own company fund.
Full Financial Planning Review
The vast majority of people have never been to
see a Financial Adviser and do not know what to
expect from a meeting with one. The role of any
Financial Adviser is to help you identify what
is important to you and to show you strategies
that can be put in place to ensure that you are
giving yourself the best possible chance of
achieving your goals.
The initial meeting will begin with a general
conversation about what you hope to achieve from
a having a relationship with a Financial Adviser
and then move to a more specific conversation
about potential strategies that you can make use
of. A fact finding exercise will be undertaken
next which will require you to provide details
on your assets, liabilities, existing insurance
policies and superannuation funds.
Once the fact find is completed it will be used
to determine whether a Full Financial Planning
Review or much simpler advice is required. This
will always be clarified during the first
meeting so that you don't end up paying for
advice that you never really wanted. If it is
determined that a Full Financial Plan is needed
then that plan will address all of the other
Areas of Advice that are relevant to you.
Please Note: The areas of advice shown
above are generalised categories which encompass
many more specific advice needs such as
budgeting, savings plans and general business
planning advice.
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