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  • Colin Lea, BBus (Ag Comm), BA, GDFP, CFP®

The value of engaging a Professional Financial Adviser

Updated: Aug 7

Sometimes there is value delivered in being able to see not what is; but what could be... The Royal Commission into Banking and Financial Services has highlighted some inappropriate practices and conduct at institutional and individual levels. The outcomes from this inquiry will continue to reshape the financial advice profession. But the broader truth is that at ground roots level, the financial advice profession always has been and always will continue to be guided and shaped, by the vast majority of Financial Advisers who have their clients best interests at heart. And those who have long standing relationships with Financial Advisers know how much of a positive impact this professional advice can have in helping clients work towards and achieving their short and long term financial goals.

Much like a major building redevelopment, people can sometimes have trouble conceptualising what can be achieved, and taking a commercial space from what is has been to a more productive version of what it could be. And the vast majority of people would realise that to do this means engaging a range of skilled professionals to take an initial concept through many complicated steps to deliver a desired end result.

So we engage Architects to design a vision, Engineers to advise on what is structurally possible and plans to translate how this will be done, Building Planners and Inspectors to ensure the plan meets code, Interior Designers to bring animated drawings to life as functional work spaces, Project Managers to coordinate the overall process and trades, and Tradies to do the important role of physically delivering the end product for the client. And along the way the client (the building owner) provides the input and answers the questions that allows the professionals to achieve the clients end goal.

Don't see what is - see what can be - and build a team of professionals to deliver.

No different then is the importance of the role a Professional Financial Adviser plays in helping their clients achieve their lifestyle and financial goals. Much like a commercial building development, a lot of the value comes from the important foundation work Financial Advisers complete - but that clients don't really see - in constructing financial strategies to deliver on client's intended goals.

The structure used for client's strategies can have deep reaching consequences over the longer term, if ill thought through or poorly considered in the first place. Considerations including:

  • Individual vs Partnership

  • Company vs Discretionary Trust

  • Inside or Outside of Superannuation

  • Ownership of Shares and Unit Trusts

  • Apportionment of Income

  • Planning for Capital Gains and Use of Losses

  • Protection of Assets from Third Parties

  • Effects (potential and actual) from Changing Legislation

  • Estate Planning and Family Succession Issues

All of these have as much value if not more than deciding what type of asset class or investment to choose, what type of risk product and how to implement, and the timing and sequencing of implementing strategies (eg: an incorrect action executed within a superannuation strategy can not be undone and may deliver significant financial penalties).

The best Professional Financial Advisers also know their limitations, when to stay in their lane of expertise, and when to engage outside help. Much like you don't expect the Architect to develop, build and implement their vision, they need to know how to engage the skilled professionals to deliver the desired end state building. And so it is with clients who have complex financial needs and goals; the Professional Financial Adviser needs to integrate into their strategy development the advice from Accountants, Solicitors, Risk Professionals, Lending Brokers and client's professional partners to name but a few.

It would be easy for me as a Financial Adviser CFP® professional to simply espouse the benefits of seeking out professional financial advice; but I do so from the perspective of someone who has sat on both sides of the Client / Adviser relationship, having been a client of the Carey Group for 10 years prior to joining the firm. Joining the firm was a decision I made to share the benefits of my experience with other clients, helping them to achieve their lifestyle and financial goals.

But I can also defer to more independent feedback from Andrew Inwood, the Founder of research firm CoreData, who states that from 19 years of research on financial advice he can show that:

  1. If you have a close relationship with your financial adviser you will be richer than someone who doesn’t have a close relationship with their financial adviser.

  2. If you have a close relationship with your financial adviser you will be more confident about the future than someone who doesn’t.

He states that GOOD Financial Advisers are the gods of small changes, making sure that clients make the best of the resources they have, and getting them to stick with the discipline of implementing the "one percenters" over and over again to achieve the outcomes of having a plan and sticking to it.

The other key part of the relationship with clients that Andrew attests to is the importance of trust; indeed our business as Professional Financial Advisers is worthless if we don't gain, nurture and build on that trust that clients give us so that we can work and act in their best interests.

The value when this is done is clear - a Professional Financial Adviser who does their job honestly and properly has the ability to transform clients lives and that of their families for the better.

My closing piece of advice is to do your homework up front before engaging a Professional Financial Adviser. Our best referrals are word of mouth from satisfied clients - indeed it is how I came to be a client of the Carey Group when the doors of the Townsville office were first opened.

It's a decision you don't wish to take lightly, for the reasons I've outlined in this article, as it can be an expensive mistake if the foundation advice is wrong. Or as I prefer to make the observation:

"If you think it's expensive to hire a professional, wait until you hire an amateur..."

#ProfessionalFinancialAdvice #FinancialStrategy

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