Discover more from Epic Retirement
Do you really understand your options for getting financial advice and help with retirement planning?
I took a deep dive into the types of advice now available to people who are approaching retirement and was surprised at the breadth of ways we can access different types of help and advice.
This week in our Epic Retirement Newsletter:
Article: Do you really understand the financial advice landscape in Australia?
Prime Time Podcast: Exercise for longevity: How muscle mass improves your lifespan
From Bec’s Desk: This week in Epic Retirement
How to Have an Epic Retirement: The Book
Do you really understand the financial advice landscape in Australia?
There was a big discussion this week in the Epic Retirement Facebook Group about what type of financial adviser is ‘the right’ type of financial adviser for guiding your journey into retirement. And it raised more questions than answers for most people in the group. So today I’m going to take a deeper look into the financial advice sector and the different types of financial advice that you should expect to come across out there in the market right now. And in coming days I’m going to release an eguide into the area of getting financial advice - which you can sign up to receive here. I’ll include a lot of valuable insights into the different services on offer, from both super funds and independent financial advisers and I’ll give you a list of questions to consider and ask too. Sign up here to get your copy by email when it’s released.
To write this article, and the eguide that will follow in coming days I spoke with several superannuation funds, spanning industry and retail sectors; the Financial Advisers Association (FAAA) and several independent advisers, some specialist and some more generalist in nature. So I gathered a lot of individual insights - too many to share today. One thing I’m clear on - the industry is working hard to help people navigate retirement. And it wants you to be less afraid of asking for help and advice, and know the difference between general advice and personal advice. They serve different roles.
You see, financial advice has fundamentally changed in the last five years, since the Banking Royal Commission in 2019. It used to be all about guiding investment into financial products and ‘growing wealth’, with most advisers incentivised by trailing or lump sum commissions from financial product companies, even independent advisers. But all this has changed when the Royal Commission put an end to trailing commissions.
So let’s boil down the types of advice you can get today, and how you might be able to use each to grow your confidence in the preparation for retirement. They all have a role to play in my opinion. You definitely might consider using more than one type!
General advice - it’s really accessible ‘help’ and education
General advice is typically the provision of factual information, not personalised to your specific financial situation. General advice is commonly provided by superannuation call centres and visiting workplace superannuation advisers and provides information and guidance on topics purely related to your individual superannuation. You might prefer to call it ‘useful help’ that will explain how things work. It is a great way to start learning and exploring about the contributions you can make; your investment options; the age pension and how people can layer their income in retirement. The people who provide this advice are usually expected to have a qualification in financial product advice, called an RG146, and may have a diploma of financial advice too. But remember - this is facts and general information. If what you are doing has any complexity, or you need any insights into your personal situation they cannot assist. But it’s a great place to start asking questions and learning how things work.
Intra fund advice - free advice available via most super funds
This is personalised financial advice provided by fully qualified superannuation fund advisers but their scope is usually limited to advising on superannuation, hence the name - intra fund. Some funds allow their advisers to provide advice for the individual member that expands wider than their superannuation, while others keep the scope limited. Intra fund advice commonly addresses your investment choices within your superannuation fund, insurances held within superannuation, contributions advice to grow your funds in super, transition to retirement advice and retirement income stream advice.
Most funds I spoke to offer intra-fund advice for free to their members, funded by their member administration fees. Some charge a small fee to guide the member through the retirement process of setting up the retirement phase accounts, while for others this process is completely free.
It is important to point out that the limitations to intra fund advice differ across funds. Some will provide advice on your wider assets, while others will only provide advice on your superannuation.
Intra fund advisers cannot provide advice across a couple unless both people are with the same fund. And if you require advice that pertains to the couple on joint superannuation strategies, investing and insurances held outside super, you will need to seek independent advice. All the funds I spoke to had preferred independent advisers to which they refer you if you ask. Or you might consider finding someone through your own networks.
Personal financial advice - comprehensive financial planning and investment
Personal financial advice is provided by fully qualified financial advisers, who are licensed and registered under the regulation of ASIC. All independent financial advisers are required to gather the client’s information properly, produce a statement of advice and comply with the regulatory requirements of the sector that have been imposed to protect consumers.
Financial advisers will usually walk you right through your big financial picture in your first meeting or two, understanding where you are now, and where you want to be. They understand your goals, your cash flow, your balance sheet, your structures, your current risk profile, your responsibilities now and into the future and the stage of life you are at.
They then take in all your information and build you a strategy that takes in your accumulation goals, retirement goals and setup. Then, they’ll guide your structuring needs setting up appropriate tax structures and accounts within your super to maximise your returns or retirement income depending on your goals. Each year they’ll re-evaluate your insurance needs too, which usually decrease as you approach retirement rather than increase. And if they’re a good adviser, they’ll explain to you why this strategy will deliver to your goals and build your confidence through a better understanding of your big financial picture.
Then, they’ll define an asset allocation for investing and roll out that investment strategy on your behalf if you want them to. Advisers can only invest in investment products from their approved product lists which are built through high quality research and under the careful eye of an investment committee. It’s worth asking how they select investments, and how diverse their approved product lists are, to see if that meets your needs. Different companies have very different approaches to try to manage compliance and risk.
There’s a few very specific things you need from your adviser when approaching retirement, they are looking for:
a more detailed review of their accumulation strategies,
the support of the shift into the retirement phase
the layering of retirement income, through a combination of the age pension and investment income streams.
These are the big areas most financial advisers are adept at, but it never hurts to ask them to explain their experience with the pension, superannuation and retirement phase advice to you.
Specialist financial advisers - for those with special needs or wants
As the financial advice industry has evolved over many many decades, some advisers have chosen to specialise in either types of investment, or types of clients. It’s worth being aware that specialist advisers exist, and that they specialise for a reason, to be able to more deeply invest in a specific and perceived higher value way of delivering their service. All specialist financial advisers have to comply by the same rules as personal financial advisers as they are in effect the same thing. You may just find that some have crafted their process and offerings to better suit a specific client group or a client need or want.
There are a few types of specialisation you will come across. Most lead their offering with any combination of:
Stockbroking or specialised investing
Family office style wealth advice
Some firms set themselves up to offer services to higher net worth families and individuals so they can focus on managing larger portfolios only.
Each of these businesses are held to the same legislative requirements, and while they invest in individual stocks and investment products on your behalf, they will do so from the basis of robust research and economic insights, done with the oversight and governance of an investment committee; and extensive compliance obligations. All of this you should expect from any financial adviser.
Calculators and tools - test your theories at home
As you look around at advice offerings, the other things to be aware of are the powerful calculators, tools and digital advice offerings that are starting to emerge. Many superannuation funds are offering their members a robust set of retirement planning calculators and tools which you can use to project your own calculations, and test out ideas. It’s a great way to start learning about your money, and how it works in the lead up to retirement. Some super funds encourage you to play with their tools, then ring their general advice call centres for more help, as the first port of call to start learning progressively about superannuation.
Digital Advice platforms and robo advice - DIY your financial planning
In the new world of advice is a selection of platforms that for a fee, will provide you with very detailed financial advice. These powerful tools, which I’ll explain more about in our eguide, are designed to give you a set of tools that collect your information, stage of life and goals and allow you to see clear recommendations based on your circumstances or individual needs. I’ve tried a few - they’re getting really powerful. They are usually offered by independent digital advice companies operating under their own license, who are focussed on advancing the technology available to help consumers with common issues and needs.
And now for the big question…
How much should you pay for advice?
Well, that really depends on what you need advice for. According to the Financial Advice Association of Australia, the average price of advice right now is somewhere around $4000 for a financial plan produced by an independent financial adviser. Ongoing services cost more.
Intra-fund advice from your superannuation fund is usually offered for free, with some services like the transition to retirement and incurring a fee with some funds in the league of $300.
There’s quite a lot to consider when you are contemplating getting a financial advisor or changing advisers. And for each person, that consideration will be different.
If you want to read more about financial advice and how the industry is changing to serve your needs in pre retirement and retirement, register for our eguide on Professional Financial Advice and I’ll send it through as soon as it’s all ready to go.
NEW PODCAST: SERIES 1, EPISODE 2
Exercise for longevity: How muscle mass improves your lifespan
An interview with exercise physiologist and exercise for longevity expert, Jonathan Freeman. There's so much helpful health advice packed into this one episode.
This week on the second episode of Prime Time with Bec Wilson, we learn all about how exercise, muscle mass and protein intake can help us age better. And more importantly, what types of exercise and how often.
I chat with Jonathan Freeman, a widely respected exercise physiologist and founder of Australia’s largest active over 50’s gym group, Club Active. He's a Professional Fellow with Southern Cross University and presents guest lectures in Functional Anatomy at numerous universities throughout Australia... AND he's worked with the likes of Chris Hemsworth and Kelly Slater, so he knows what he's talking about.
I learned so much about exercise, protein and muscle mass from this conversation and I’ve already adopted some of his lessons into my everyday behaviours.
LISTEN HERE - LATEST EDITION (S1E2) - OMNY
or listen on APPLE PODCASTS
Here’s some highlights:
According to Jonathan, only 1 in 10 Australians over the age of 50 do enough exercise to keep their hearts healthy and improve longevity. And he says physical inactivity is the biggest killer…
The three most important things you can do for your body as you age: Build your muscle mass, improve your V02 max and work on your joint longevity
He explains the way we can look at our body’s functional age, rather than our chronological age.
How people 50s-65s are looking to slow down the onset of ageing, and pointing out that our generation didn’t grow up with the gym, nor with the information and education on health and exercise that younger generations did, so we approach it differently.
The impact that our local community can have on our longevity, and considering how we can be supported to change the way we age.
Muscle mass and the muscle index score - how we measure it and how we improve it.
People over 50 who don’t currently go to a gym, need to understand structured exercise programs and their role in growing our muscle and strength - which contributes to longevity.
Cardiovascular health and your VO2 max - how we improve it, and how the various zones of cardiovascular exercise work, and where we get optimal results.
The critical role protein plays in our bodies and how much protein we should think about consuming to maintain our muscle mass
From Bec’s Desk
Well hello! It has been a busy few weeks here at Epic Retirement and I can’t wait to tell you all about it.
The Prime Time podcast is going from strength to strength. Thousands and thousands of people have tuned into our first two episodes so far. I really enjoy getting to ask the questions of some rather amazing experts at the very forefront of how we can live longer, better quality lives. Be sure to find us on your favourite podcasting platform (links above), and give it a listen. And don’t forget to subscribe! The podcast drops every Thursday and we email out the highlights if you sign up for the Prime Time Newsletter at www.primetimers.net.
The Epic Retirement education program is now ‘in the can’ with more than four days of filming now finished. We are now working to build it into an online education program we can launch for you in the coming months. Be sure to jump on our waitlist for the release if you want to be one of the first participants.
I’ve taken up a regular slot on ABC Darwin and the NT, in a new segment with Alex Steer’s Tuesday morning program every other week that they’re calling ‘Retire Like a Rockstar!’ - what a hoot that is. If you’re anywhere in the Northern Territory be sure to listen out!
And then, there was last week’s column in the Nine Newspapers, The Sydney Morning Herald, The Age, The Brisbane Times and WA Today - How much super do we really have at retirement? Less than you think.
It’s keeping me busy. I have been planning for 2024, and am preparing some in-person full-day retirement seminars for Brisbane, Sydney and Melbourne, and some of the regions too. I wanted to get your feedback on coming along to an event where you can learn alongside up to 80 people at the same or similar stage of life, interactively!
I look forward to your honest feedback. Thanks for being curious! Pop in and like this post and leave me a comment about your financial advice experiences here on the article…
Many thanks! Bec Wilson
How to Have an Epic Retirement is the ultimate guidebook for modern retirees. It is grounded in my own widespread research on modern retirement, and draws on my prior ten years as the CEO of Starts at 60 and Travel at 60 (before I stepped away to pursue my next career in retirement education). It also draws on the work of the leading thinkers in the longevity, health, happiness, purpose and modern ageing spaces and incorporates many interviews with people who have navigated the sometimes challenging path into retirement.
I am incredibly proud of the response to the book so far. It has sold out online in Amazon and Booktopia several times and run the warehouse out completely. It has also reached #4 on Booktopia’s National Bestseller list, #8 on Dymocks Business & Finance Books list and #1 on Amazon Australia in the category of ‘Retirement’.