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Wednesday, September 15, 2010

Getting to the heart of financial advice

Editorial - August 2010

When the subject of financial advice is raised there is always plenty of comment on what it costs, but precious little about what value such advice can have. So it's fair to ask; is there value in getting financial advice? Is the cost justified? How do you separate myth from fact?

Recent research conducted by CoreData commissioned by the Association of Financial Advisers (AFA) into how consumers view financial advice may help answer these questions. The research indicates that people who have a financial adviser are better planned and are happier with their investments than those who don't.

The answer seems to lie in the fact that financial advice is not just a matter of processing facts and figures, nor does it revolve around having a 'crystal ball' view of what the next stock market move is going to be. Those who have a financial adviser seem to attribute a much deeper, more personal value to having a confidante or coach that can help them to define their goals and discuss their desires, fears and aspirations for the future.

"I liken my role to that of a 'financial dentist'. Nobody likes the initial thought of coming to see me, but everybody likes the end result! Many of my clients have understandable trepidation when we first meet because they don't really know what to expect. This quickly disappears once they begin to share their financial concerns and realise I can help them answer some deep questions about their financial plans and help get them get to where they want to be. There is no pain involved either - simply choices!

It’s a good feeling to see people visibly relieved once they start sharing their fears and hopes and when together we start to put things into perspective. Of course the technical aspects of what I do are vital, but in the end it's the emotional investment that a person puts in me first that really matters, before we consider the financial investments they may need to make".

The increasing regulation of financial advice over the last two decades has seen compliance within the industry becoming more stringent. The level of education and training required to permit someone to run an advisory practice is a far cry from the days where anyone could be employed to 'sell a product'.

"The accreditation regime now in place is quite rigorous and advisers are now required to consider the breadth and depth of a client's situation in great detail, before formulating recommendations. This professional approach is no doubt related to the increased level of trust that financial advisers enjoy from their clients.

The combination of taking the time to understand a person's financial aspirations and applying our professional expertise to their situation, allows us to develop a plan that helps them face the future with confidence. This includes setting out strategic principles, providing tactical advice on suitable investments and facilitating the implementation of the plan we agree on".

"Every day I see the results of people having the weight of investment decisions lifted from their shoulders, so I make a point of asking them to spread the word and tell their family and friends about how getting advice has helped them. Good financial planning speaks to the heart and the head - and that is what makes it such a worthwhile exercise".

If you are interested in exploring the benefits of financial advice, contact Hugh Kilpatrick from Reservoir Office on 03 9471 0080 or for further information.

*Hugh Kilpatrick is an Authorised Representative of RI Advice Group Pty Limited (ABN 23 001 774 125), Australian Financial Services Licence 238429. This editorial does not consider your personal circumstances and is general advice only. You should not act on any recommendation without considering your personal needs, circumstances and objectives. We recommend you obtain professional financial advice specific to your circumstances.

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