HOW A FINANCIAL PLANNER CAN HELP YOU

Every person has different requirements when it comes to the management of their wealth. Some people are focused on meeting their basic needs only, others have basic needs as well as certain lifestyle requirements that their financial plans need to meet, and there are those who are focused on legacy issues, having met the first two needs. The outcome that you wish to achieve will have an impact on how you should be invested

Some people are still contributing to their portfolios, others are on a contribution-holiday with high lifestyle expenses, and others are drawing income in retirement. Regardless of which stage you are in, you need to know that all of your capital is being invested efficiently, in line with your objectives, and that all financial expenses are necessary and appropriate. One can have too much insurance, be contributing too much to an RA, or have too much invested in SA with no offshore exposure.

Costs are a necessary evil when it comes to investing. what you pay should be commensurate with what you receive. high costs do not necessarily reflect value, and low costs do not necessarily mean higher returns to you. understand and have sight of all the costs and prioritse the costs that add value.

Investor decision-making is typically driven by fear and greed. When market values are high and everyone is making money, investors are greedy and want a piece of the action. Everyone wants to invest in equities without consideration of the risk. Friends share stories of their successes. When market values are low and falling, investors are fearful and want to sell.

Human nature pushes them to protect what they have and encourages them to sell. Only in selling does one actually realise a loss – until the sale takes place the loss is just a paper loss, and has no bearing on true wealth. Remember at all times that investments are seldom valued correctly – they are usually too expensive or too cheap, and this is when a qualified wealth manager adds value far greater than their cost.

Research has consistently proven that days out of the market account for greater losses than investors who commit for an investment cycle experience. Time in the market is more important than timing the market.

Trusts and companies used to be efficient legal entities as holding entities for investments. More recently legislative changes have minimised many of these benefits, making many of these structures both expensive and tax inefficient. There are still however good reasons for a trust or a company, and we can advise accordingly.

Life assurance has a place in everyone’s portfolio, along with investment and retirement funds. Planning to live for a very long time is as important as planning for the unforeseen impact of an early death.

There is a difference between saving and investing – do you understand the difference? Have you considered the impact of inflation on your long-term investments and retirement funds? Tax is a necessary evil – one of life’s two certainties. There are opportunities to take advantage of the tax concessions available, and the savings can often outweigh the costs of a good financial advisor.

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