Advice is far more than a technical answer to a financial question.
“Goals aren’t just about dollars and cents, they require context,” says Advise Wise Managing Director, Matthew Fenning.
“Our role beyond just strategies and numbers is to uncover what it is that you’re looking to do and why it’s important to you.”
Investment returns and fees may grab the headlines but pinpointing your specific goals and how to fund them can create benefits equal to a 5.2% extra annual return, according to research by Russell Investments.
But it’s all too easy to fall into the trap of setting a goal that’s not really yours to begin with.
Financial goals are often inherited from others, whether it’s well-meaning advice from parents, trying to keep up with friends, family or colleagues, or just something read in the media or on social media.
It is easy to fall into the trap of basing goals and decisions on the beliefs and biases of others, or to frame goals based on what those around you are (or are not) doing.
There are many ways that personal needs are prioritised and expressed as financial goals, but one of the main challenges is to stay objective.
A good adviser can help you make the assessment and produce a plan so that you can achieve your goals. They’re more than just numbers in a spreadsheet – they incorporate factors such as your values, priorities, preferences, beliefs and behaviours.
Advise Wise applies a systematic methodology to help identify and clarify these factors while developing a comprehensive personal and financial plan, including to update and change as it evolves over time.
Recently, one Advise Wise client in his 40s came to us saying that he wanted to retire in five years.
But to make such a large shift in such a short amount of time required taking on significantly greater investment risk than his current asset allocation and taking out more debt.
We discussed his preferences, priorities and values, before mutually agreeing on a plan that allowed him to achieve balance and flexibility, while avoiding the significant risk he initially faced.
“We discovered that in fact, he wanted to change the priorities in his life from being very much centred around work to being more balanced and having greater flexibility.”
There was another option he hadn’t considered: investing in a manner consistent with his current approach without using debt and in five years’ time cutting back to working part time (or on a contract basis), including the option of taking six months to a year off work periodically.
He said, ‘I wouldn’t stop working but to have the freedom to prioritize other aspects of my life – that sounds like what I want to be doing.’
He went from viewing an early retirement as a black and white proposition, to something that was achievable and what he was actually looking for.
While it shows that different stages of life often act as a prompt to get advice, it also demonstrates that everyone is different. An adviser acts as a sounding board to help uncover exactly how you can get to where you want to go.
New technology can now power sophisticated investment simulations and forecasts, but it can’t replicate the tailored personal advice that an adviser can provide.
A key part of the value that an adviser provides comes from their insights into each client’s individual goals, motivations and concerns.
Achieving the lifestyle, you want takes more than a technical answer – it needs a nuanced understanding of who you are, accompanied by Advice for Life.
 In challenging times financial advisers still deliver value | Russell Investments. (2021, October 31). Retrieved from https://russellinvestments.com/au/about-us/press/2020/in-challenging-times-financial-advisers-still-deliver-value
If you’d like to discuss your current situation or have any questions please contact us.
The information contained within this website does not consider your personal circumstances and is of a general nature only. You should not act on it without first obtaining professional financial advice specific to your circumstances. Before purchasing any financial product, always consider the relevant Product Disclosure Statement (if applicable) which provides full details of risks, terms and conditions.
Some details (including names) have been modified for privacy purposes and assumptions have been applied regarding future interest rates, investment returns, the client’s circumstances and other financial and economic variables for illustrative purposes – actual outcomes may vary.
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