Last week we dealt with choosing an adviser and this week we will deal with the advice itself.
First things to bear in mind
If you want extensive advice, make sure the adviser is an AFA (authorised financial adviser), and always check their systems to make sure that they really will protect your money.
What school do advisers go to?
Most of us have degrees or diplomas.
Some of us in a former life were teachers, engineers, geologists, pilots, accountants, bank managers, ministers, and more.
Learning on the job
Like my peers, I've gleaned my knowledge from many sources in the 28 years I've been in the business:
* The classroom (we are required to pass exams)
* Various industry courses and conferences
* We are required to obtain 15 to 25 education (CPD) credits annually
* Reading, reading and reading
* Experience
* Listening to others
* Working with people
My work with ordinary Kiwis has taught me so much. Over the years I have learned from them what works, and, perhaps more importantly, what doesn't.
These real-life lessons, plus the writing I do for my weekly articles, find their way into my work daily and play a big part in the advice that I give.
Some keys phrases I have learned
* What does common sense tell me?
* If in doubt, do half
* There's no free ride
* If it's offering big interest there will be big risk
* Diversification is free
* Commissions distort advice
There is no place for egos
I am painfully aware of my limitations.
"You can only predict things after they have happened," said Eugene Ionesco
No one can forecast or pick shares, markets, exchange rates or economic events consistently, year in, year out.
What I do for people age 50 to retirement
* Ensure you have emergency money in place
* Review your insurances (advice only, we don't sell them)
* Plan to get rid of debt before retirement
* Help with retirement planning before retirement
* Set up and monitor retirement savings programmes
* Build an investment portfolio based on your individual risk profile and timeframe
* Look at existing assets -- do they need attention or restructuring?
* Overview whether or not a family trust is needed
* Help with the decision of when to retire
* Look at all the issues around selling businesses or farms
* Calculate your probable retirement income
* Review annually
* All the way through, ensure your funds are diversified
* Continually monitor investments and rebalance as necessary
* Help remove any rose coloured glasses
What I do for people who are retired
* Look at existing assets -- do they need restructuring?
* Set up an investment portfolio if you don't have one already
* Set up an income system that meets your cashflow needs
* Help with the all-important investment discipline in good and bad times
* Manage investments while you are away
* Nag you constantly about up-to-date wills and EPAs
* Give advice when your grown-up children ask for a loan
* Calculate how your money is holding out
* Try to ensure your money doesn't run out before you do
* Advice on "eating your house"
* Be an independent sounding board over lifestyle and family finances
* Applying for Winz benefits
* Advice on funding if/when a move to a rest home is necessary
We are not solicitors or accountants Advisers often see things from a different angle, and sometimes that can be very helpful.
General financial advice or investment advice?
The lines can get blurred, as it may be you are looking for:
* Financial advice but have no money to invest
* Financial advice and also investment advice
* Investment advice only
How often should you get advice?
Fail to plan, plan to fail.
Initial advice might get you started, but your financial affairs are like cars, planes, buses, trucks, tractors, your body, or indeed your marriage.
All need on going attention and maintenance.
Review your financial planning at least annually.
Fail to plan, plan to fail. Fail to maintain, breakdown.
Alan Clarke is a financial and retirement adviser and author. His second book, The Great NZ Work, Money & Retirement Puzzle, is available at acfs.co.nz Alan is an independent authorised financial adviser (AFA) FSP26532; his disclosure statement is available on request and is free.
