When Should You Get A Financial Advisor [10 Situations Explained]

Financial Planning

When should you consider getting a financial advisor? You’ll get a variety of answers to this question, with one of the most common being when you are planning your retirement. This is absolutely correct, but as financial advisors, we can build plans for people at any stage of their journey from:

  • starting out
  • building wealth
  • counting down to retirement
  • in retirement

The key with financial planning is that you shouldn’t wait too long to start. Ideally, the best time to see a financial adviser is when you’ve gotten established in your career, you have a steady income in place, you are sitting on a nest-egg, or you’re ready to set your long-term goals. This is usually in your mid 20s to 30s.

Key Takeaways

  • What financial advisors do
  • Real life examples of 10 situations when you should see an advisor
  • How to prepare to meet with a financial planner

In my experience, significant life events or milestones are often a trigger for clients to think about financial planning. Starting a family, getting a big pay rise, or looking to buy an investment property are some of the many situations that are clarified and eased with the help of an expert advisor.
In this article, we’ll explore some of these situations and why they are a good time to see an advisor. I aim to give you insight into when you can get a financial advisor, and how they can help with your particular stage of life or financial situation.

What Do Financial Advisors Do?

Before you can know when you should seek financial advice, it is important to understand what financial advisors do. Financial advisors are professionals who provide financial guidance and advice to clients. They can help clients with various financial issues, including budgeting, investing, retirement planning, wealth management, superannuation, tax planning, and insurance.

Different financial advisors have different approaches to their planning, but to properly advise you, they will need to take a deep dive into your financial situation. To provide you with an advice document or Statement of Advice, they’ll need to learn about your assets, liabilities, income, expenses, and most importantly, your financial and lifestyle goals.

Most importantly, in Australia financial advisors are required by ASIC to act in their client’s best interests, both present and future.

What are the main duties of a financial advisor?

The main duties of a financial advisor typically include:

  • Assessing a client’s financial situation and goals
  • Developing a personalised financial plan for the client
  • Recommending investment and insurance products that are suitable for the client’s needs and risk tolerance
  • Monitoring the client’s investments and adjusting the plan as necessary
  • Providing ongoing financial education and guidance to the client

Financial advisors may charge a straight commission every time they make a transaction, a fee based on the amount of money that they manage, or an hourly rate. Find out more about our fees.

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10 Situations When You Need A Financial Advisor

Managing your finances can be challenging at any time, but especially when your financial success hangs in the balance or you have a big decision to make. Unexpected situations or life milestones, such as changing careers or starting a family, can have a significant impact on your financial future.

This is where a financial planner comes in. We’ve selected the below situations from the enquiries we receive, and it’s easy to see how these key turning points trigger big financial decisions and the need for professional advice. Keep in mind, we’ve changed any personal details to make them anonymous.

1. You’re looking to buy a property

“My partner and I are in our very first step of buying our first house. We are tossing up between an investment unit or a property to live in. We would like to know what our financial status is and how far off we really are from buying.”

“About to purchase an investment property but was hoping to have a discussion about the best pathway to structuring this purchase to ensure it meets my future investing aspirations.”

Comments like the above arrive in our inboxes regularly. Sometimes buying a property seems easy – a natural next step. Other times, it is a hard-won achievement, that involves numerous helping hands and perhaps years of faithful saving. However, investing in property remains one of the first things that comes to mind when people think about growing their wealth.

If this is you, then you might begin your journey by researching the best locations for investment property or calculating how much deposit you would need to buy a property in Australia.

Consider adding an additional step – seeking property investment advice to make sure your scheme will have a positive impact on your long-term life goals. To emphasise the importance of this, we also receive requests from those who have bought an investment property that has become a millstone around their necks, and they need help to financially recover. The value of quality, unbiased, and non-speculative advice is that it helps you avoid this pitfall and instead carefully build a portfolio that grows your wealth.

2. You want to start retirement planning

“Hello, do you offer consultations for projecting income levels at retirement based on savings, assets and contributions?”

“After finishing our corporate careers, my wife and I are now small business owners, approaching retirement. After managing our super funds (without advice) for the last few years, we are now seeking advice on how to best re-balance our finances for retirement and eventual family inheritances.”

One of the most common reasons that we get enquiries is when individuals or couples start thinking about their retirement plans. Sometimes they need help in structuring the plans they’ve been working towards for some years. Sometimes, the approach of retirement has come as a shock and they need to ‘catch up’ and get systems in place rapidly to secure their retirement.

As retirement approaches, other pressures may come into play. You may need to know what your budget will be after retirement, or you may feel overwhelmed by the prospect of downsizing your home. It’s also crucial for Australians to plan for their aged care needs, and how aged care expenses will be funded.

We recommend getting started on your retirement planning as early as you can. This can ensure you are well prepared – and well padded – when retirement inevitably arrives. A financial strategy is ideal for both long-term plans and projections, the transition to retirement and post-retirement needs such as estate planning. A good advisor will ensure your retirement investments are optimised, your transition is smooth, and any valuable strategies or financial entities that will benefit your retirement lifestyle are in place.

3. You need investment advice

“Looking for some advice on whether an investment opportunity is a good idea. I am moving on from my current employer and they are giving me the option to execute my options for shares. Wanting to know if it’s a good decision.”

“How do I invest large sums safely and wisely? I would like to maximise my returns, and have my savings work for me.”

“Seeking ways to further invest and reassess our current investments and work out how we can make them work harder and faster for us. Seeking advice on tax minimising etc.”

Most people are aware of the long-term wealth benefits of investing. However, there is a lot of hesitation, and even fear associated with investing in the stock market and uncertainty about what types of investments are best – these days that anxiety is being triggered by post-pandemic changes and volatile cryptocurrency trends.

If you are just starting with investing, there are excellent tools and apps available, and you probably don’t need an advisor. Be wary of fin-fluencers and online ‘investment gurus’ however. Some are experienced and knowledgeable, but others are dangerous. In my opinion, DIY investing requires excellent self-awareness to overcome the traps of ‘investor behaviour’ and steer clear of charlatans.

You should talk to an investment advisor if you want to diversify your investment portfolio, you want to make significant ongoing contributions, or if you have suffered substantial losses in the past from DIY investing. With professional advice, you can avoid riding the roller-coaster, get access to market experts and experienced fund managers, and create a clear strategy that includes risk management and investment goals.

We don’t do stand-alone investment advice. We do incorporate our C.A.R.E. Philosophy into your holistic financial plan, and utilise strategies like dollar-cost averaging to maintain steady growth.

4. You received an inheritance or payout (or you won the lottery!)

“Hi there, I recently received a TPD payout and would love to discuss my finances with a professional who can provide me with all the advice I need.”

“I have been left a lot of money & I have no clue what to do with it. It’s just sitting in a savings account. I need some advice on investments/savings/how to manage it & basic information.”

Receiving a substantial sum of money all at once can be life-changing, and it is so important to use it wisely and well, but people in this situation often struggle to know what to do next. The worst outcome of this uncertainty is spending it on something that does not benefit your future. Read our case study below on how this went down for a Queensland business owner.

We have clients who have received a significant windfall and have approached us for our investment approach on how to best optimise and invest the funds for long-term financial security. Seeking the assistance of a financial advisor can provide valuable guidance towards creating an intelligent investment strategy, which not only safeguards but also enhances your existing portfolio. Managed correctly, a significant payment can be used to set up your future or provide ongoing income.

Case Study: The Guy Who Sold His Business

Ben* sold his Queensland tech business for $300k. He sat on the money for three months, unsure of what to do next. Not working, and with a significant bank balance, he shouted a lot of drinks and dinners while he tried to decide: should he invest or should he keep it? Asking friends for advice led to suggestions for another business idea: buying trucks. He spent $200k of what was left on a truck to run an earthmoving business – without knowing what income the truck would generate and without experience in that industry. Now, with the proceeds of his business spent, he gets up at 4 am every day to drive trucks.

Now, he could still make gold out of the sand he is transporting. However, he has now started from scratch on another business that is more difficult to scale, and without the benefit of money in the bank or investments building passive income on the side. With professional advice, Ben could have gotten a sense check on his plan and put strategies in place to ensure his step forward wasn’t actually two steps back.

Talk to an advisor today

5. You are moving from overseas or interstate

“I have recently returned from living overseas and want to get my financial goals set. I want to buy a house in the next year or two but have money in all different places and will be paid through an ABN as well as an employee payroll. It’s all very confusing!”

“Hello, I will move back to Australia shortly. I am looking to set up a consulting company and need advice on financial management and tax implications. Can you assist?”

Moving to or from overseas can present a unique set of financial challenges, which is why many of our clients come to us for advice during this transition. For those moving from overseas, we understand the need for expert investment advice that takes into account the daunting changes in systems (e.g. superannuation) and rules (tax and financial legislation). Our financial advisors can assist with planning for buying a house, setting up your Australian finances and updating your financial goals, and making the most of the funds available to secure long-term financial stability.

For those who are moving interstate, a financial advisor can help you create a comprehensive financial plan that accounts for your new lifestyle, goals, and living expenses. At My Wealth Solutions, our advisors never give generic recommendations. Instead, we personalise our approach to align with your specific financial situation so that you can make informed decisions and smoothly transition to your new location.

6. You have a high income but little time

“My wife and I are earning more than we know what to do with. Our income is growing and I don’t feel as though we are maximising our spend vs return. Would like to discuss options for managing finances going forward to ensure I use money a lot smarter.”

“Family financial planning. We are high-income earners who want to make our money work for us & our kids into the future.”

Often, the more income you earn, the less time you have available to manage it around your job, personal and family commitments. On the other side of the coin, the more assets or income you have, the more time you need to devote to ensuring it is not wasted and you’re making the most of it.

Typically, when individuals in Australia find themselves among the top 10% of high-income earners, they start thinking about how to pay less taxes, how to invest more, and how to start structuring their estate with the help of a wealth manager. If you’re money-rich but time-poor, it’s vital that you get personal advice to create a strategy and fill in the gaps.

As a side note: Australians are among the most wealthy in the world – according to the Australian Bureau of Statistics data, earning an average of $1,807.70 p/w (Nov 2022). As a nation, we rank #12 in the world for median income, and currently rank #1 for net worth (thanks to superannuation and real estate). Are we making the most of it? It appears that many Australians may require the services of a financial advisor more than they realise.

7. You’re planning to start a family

“Interested in knowing how maternity leave will impact me as the primary earner and my self-employed partner financially and what our best options are.”

“Last July we welcomed our first child so getting our finances in order has become even more important. I am currently on maternity leave and will be returning to work on a part-time basis soon. Looking to get some clear guidance about how to maximise our savings and really make our money work harder for us.”

Starting a family is an exciting time, but it can be filled with stress and uncertainty around life changes, reduced income due to maternity leave, and lots of additional expenses. When starting a family, it is crucial to consider the financial implications that follow – and it’s not just about yourself anymore! You might need to rethink your goals and get a plan in place to meet your new responsibilities.

Some of the key expenses that you can start planning for are expected – childcare costs, and all the paraphernalia that comes with preparing for a new baby. There are also potentially unexpected costs – fertility treatments for instance can be costly. Longer-term, you should think about the cost of education. All parents want the best for their children, but the best schools come with a significant cost that needs to be factored into your financial plan.

From childcare to year 12 graduation, the expenses can add up to more than a staggering $400,000, according to the University of Canberra’s recent study. Seeking help from a professional financial planner can prove invaluable when developing a plan to deal with expected changes in income, future education needs, achieving your other financial goals, and also leaving a legacy behind.

8. You’re going through a divorce

“Partner and I splitting up. I want to keep the family home for my two young boys, but they want their share of the house value. Looking for options to achieve this without selling the home.”

“I have never seen a financial planner, but after going through a divorce recently and losing half of my superannuation, I need to find different ways to become financially free, while setting up my future. Looking into an SMSF.”

Life throws us curve balls sometimes – and as much as many of the situations we find ourselves in as humans are deeply emotional, they are also financially significant. Divorce (or separation) is one of those things and it is even more difficult when those emotions and finances are so entangled!

When clients come to us during or following a divorce, they are often very unsure of how to proceed financially and feel discouraged about achieving their personal goals. It’s crucial to seek the advice of a financial planner during these times to help you navigate the changes and financial impacts and make informed decisions. Financial advice for divorce is as important as having a lawyer who can help you analyse the long-term financial implications.

While we seek to help at any stage, if you are going through a division of assets or are in the middle of negotiations, we can’t provide advice on this as your current situation is undergoing a significant change that is out of our control. We refer clients at these legal stages of divorce to our preferred family lawyers to provide support or legal advice services. We can assist before divorce proceedings begin, but primarily we specialise in helping clients navigate the new financial landscape after the divorce settlement.

9. You just got a promotion

“I have recently changed jobs and I now receive more than just a salary – bonus, shares, etc. I want to understand how I can minimise my tax, set up a future passive income strategy, and fundamentally make my money work for me over the next few years.”

“I have just recently received a promotion at work and am now earning more money than I ever have in my career. Because of my poor money management, I also feel I have less money than I had before. I need help reviewing my budget and expenses and putting a plan in place.”

If you’ve received a promotion, or changed careers recently, congratulations! This is an exciting time for you, particularly if it comes with a significant pay rise. However, sometimes having extra money coming in just means that you have more to spend. Getting on top of it quickly with a financial plan and strategy can mean you are saving effectively and investing with that extra cash or building your emergency fund, rather than wasting it. As Jesse Mecham, founder of YNAB, puts it, “Use today’s money to write your future.”

A financial plan can also ensure you have protection in place like income insurance, and tax planning to make sure you aren’t paying too much. It can make sure you avoid the wrong investments, and that you can put money aside for splurging confidently, knowing that it isn’t undermining your future.

10. You want to change your superannuation fund

“Hey, I am looking at planning my future out. I would like to fix my SMSF and find an appropriate one. I also have a bit of cash so would like some recommendations on how to use that.”

“I’d like to structure mine and my wife’s super, investment products, and insurances a bit better and make sure I’m doing the best I can.”

If you have been considering switching your super fund options, you are among one-third of Australians that are concerned about their super fund returns. While super fund returns are subject to market variations, it can make a big difference which super fund you are with. One in five super funds is returning below their benchmarks, according to APRA (Australian Prudential Regulation Authority), while some have high fees but low member benefits (April 2023).

Selecting the right superannuation fund can therefore have a big impact on your retirement outcomes. You can do your own research, considering the factors you need to take into account, but it is always a good option to get some expert advice if you don’t want to DIY or you have a more complex financial situation.

When incorporating superannuation planning into our strategies, we consider things like life or income insurance and if it’s included in your superannuation fund, your concessional and non-concessional contribution strategies, and your timeline to retirement. If you’re thinking of talking to a financial adviser about super, make sure they are independent of bias. We don’t receive commissions for the superannuation products we recommend, and we believe that approach is best for you, the client.

What to Prepare Before Seeing a Financial Planner

If you’re resonating with some of the situations mentioned above you might start asking yourself, “How do I get started in finding a financial advisor?”.

My suggestion is that you read our articles discussing how to evaluate if your financial life is at that stage, then consider if you are ready to set goals and take ongoing advice. Not everyone wants to be told what they should do, and that’s totally ok. If you tick those boxes in the affirmative, then you should start looking for an advisor that suits you!

Top 10 Financial Advisors has some tips on how to find a prospective advisor. Once you’ve booked your initial appointment, it’s important to prepare to ensure a productive and successful meeting. You’ll also have more confidence to know if you’ll be happy to work with them. Here are some helpful tips to consider before your meeting.

1. Define your goals

Before the official meeting with your advisor, take some time to write down your goals. Do you want to retire comfortably? Have a luxury lifestyle? Pay off debt or save for a deposit on a home? Having a clear idea of what you want to achieve can help a financial advisor to provide you with a personalised plan. Alternatively, if you need help defining what your goals should be, an advisor can also help you navigate that.

2. Gather information

Having all your financial information ready before the meeting not only saves time for both you and the advisor but also helps you to understand your financial situation better. You can start by listing out your assets and liabilities, accessing your Super and MyGov account, and preparing bank statements, insurance policies, and investment portfolios.

To obtain a comprehensive overview of your assets and liabilities, and streamline the process of creating Excel charts, it may be beneficial to use a budgeting app such as My Wealth Portal.

3. Prepare questions

It’s wise to prepare questions to ask your advisor in the first meeting. These questions should be focussed on evaluating if this particular advisor will meet your needs in the way you expect. It is best to start with the same understanding of what you’re looking for!

Some questions to ask

  • “Do you have other clients in a similar position, and how long have you been advising them?”,
  • “Do you have any relationships or associations with recommended financial products?”,
  • “What is the risk attached to your recommendations?”,
  • “Do you implement the plan in full on my behalf?”, and
  • “What are your fees and fee structure?”.

Remember, a good financial advisor will use the information you’ve provided to create a thorough financial analysis of your situation, and will include your goals and aspirations for yourself and relevant family members. But we can only work with what you share with us; financial planning is an ongoing conversation between advisor and client.

Conclusion

In conclusion, finances have many nooks, crannies, and complications. Keeping up with it all, as your life changes and speeds from one stage to the next, can be pretty exhausting. We all know that feeling of not keeping up!

As a financial advisor, I find it deeply rewarding to help my clients find that bit more space, and much more confidence, in their finances. Even more valuable is the knowledge that they are protected if unexpected situations should happen!

At My Wealth Solutions, we use a holistic approach that gets to know you and your situation as the priority and uses your lifestyle and money goals to create a customised solution and financial roadmap for your future. If that sounds like something you’re looking for, talk to us today about our no-obligation Discovery consultation.

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Josh Bareham - Senior Financial Advisor

Josh has worked in financial planning industry for more than six years, with a history of specialised advice for medical professionals. Originally hailing from the Sunshine Coast, he completed his Bachelor of Commerce, majoring in Financial Planning and Accounting, at the University of the Sunshine Coast.

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