Managing your finances can become increasingly complicated as your wealth grows.
With retirement savings, investments, property, insurance, tax, and competing financial priorities to consider, it can be difficult to see the bigger picture, especially when each area is managed separately.
This is where a financial planner can add value. They can help you understand where you are today, where you want to get to, and what steps could bridge the gap.
Rather than looking at individual financial decisions in isolation, a planner can create a strategy that considers your wider circumstances, priorities, and goals.
Here are seven practical ways a financial planner can help you achieve your financial goals.
1. Helping you to see your finances as a whole
One of the biggest benefits of financial planning is having someone look at your finances as a whole rather than considering each decision separately.
They can help you manage competing financial priorities, such as paying off your mortgage, helping your children, building wealth, or preparing for retirement.
It can be difficult to know whether all these decisions are working together effectively.
A financial planner can bring these elements together, identify potential gaps or conflicts, and create a strategy that gives you a clearer view of the bigger picture.
2. Turning your goals into a robust financial strategy
It is easy to say that you want to retire comfortably, become financially independent, or travel more in later life. The challenge is turning those aspirations into something you can actually plan for.
A financial planner can translate your goals into specific financial objectives, estimate their costs, and assess how your savings, investments, and superannuation could help you achieve them.
Cashflow forecasting can also help you understand how your financial position could develop over time and whether you are on track.
Importantly, a financial plan shouldn’t be something you create once and then put in a drawer. Your circumstances and priorities will change, so regular reviews can help keep the strategy relevant.
Find out more: How a cashflow model could provide clarity about your retirement income
3. Making better-informed financial decisions
Financial decisions will often involve competing priorities. For example, if you receive a lump sum, should you reduce your mortgage, boost your retirement fund, or invest the money?
Similarly, as your income increases, how do you balance the cash you should keep available with other priorities, such as insurance costs and, indeed, enjoying yourself?
A financial planner can help you understand the potential implications of different choices, so you can make decisions based on your circumstances rather than simply following the latest financial trend or advice from friends and family.
This perspective can be especially valuable when decisions involve substantial amounts of money or have long-term consequences.
4. Building tax considerations into your wider plan
Tax systems include various rules and concessions on retirement funds, investments, and capital gains. Understanding how these interact with your circumstances can be challenging.
A financial planner can incorporate tax considerations into your broader financial strategy, working alongside your accountant or tax adviser where appropriate.
The objective may not be to minimise your tax bill at every opportunity. Sometimes paying tax is the appropriate outcome if it produces a better overall financial result.
As a result, tax is best viewed as one part of a financial decision, rather than the sole reason for making it.
5. Creating a sustainable retirement strategy
Retirement planning is about much more than accumulating a large retirement fund, although having sufficient assets is clearly important.
You also need to consider how your assets could generate an income, how much you are likely to spend, and how long your money may need to last.
A financial planner can develop a retirement income strategy that considers all your potential income sources. They can also help you consider when to access different assets, how much income you may need, and how to respond to your changing circumstances and objectives.
A clear retirement income strategy can give you more confidence about when you can retire and whether your savings are likely to support the lifestyle you want.
6. Staying focused when circumstances change
Emotions, family circumstances, and our experiences can often influence financial decisions.
A significant fall in investment markets, for example, may make you want to sell even when doing so conflicts with your long-term strategy. Conversely, a period of strong returns could tempt you to take more risk than is appropriate.
A financial planner provides an independent perspective and helps you focus on your longer-term objectives rather than reacting to short-term events.
A good planning relationship should help you understand your options, stay in control of your decisions, and make them for the right reasons.
7. Having someone to act as a financial sounding board
Perhaps one of the less obvious benefits of financial planning is having someone you can talk to about important financial decisions.
You might be considering starting a business, making a career move, or helping your children financially. These decisions may not always have straightforward financial answers, so having someone who understands your wider circumstances can help you assess the broader implications and how a decision fits into your overall plan.
Regular conversations with a financial planner can also keep your longer-term objectives on the agenda and ensure your plan reflects the life you want to lead.
Effective advice can boost confidence and add real value to your plans
Research by the Financial Advice Association of Australia (FAAA) found that 93% of advised Australians say they are tangibly better off because of their adviser.
Similarly, research by the UK’s Financial Conduct Authority (FCA) found that 85% of consumers who received financial advice were confident in it, highlighting the value consumers place on professional financial guidance.
There’s also strong evidence that working with a financial planner can add real financial value to your plans.
For example, a Morningstar report suggested that robust advice can help generate 29% more income in retirement, while Vanguard has estimated that expert investment advice can potentially add approximately 3% annually in net returns. Importantly, much of that value comes from financial behaviours as well as fund choice.
At bdhSterling, we have a wealth of experience helping clients build sustainable financial plans to secure their long-term financial future.
We will also regularly review your plans to ensure you stay on track to achieve your goals.
Get in touch
If you would like to talk about your own plans, please get in touch with us.
Please note
The value of your investment can go down as well as up, and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
This article is for information only; it does not take into account your personal objectives, financial situation, or needs.
Please do not solely rely on anything you have read in this article and ensure that you conduct your own research and get expert advice to ensure any actions you may take are suitable for your circumstances.
All contents are based on our understanding of HMRC and ATO legislation, which is subject to change.