Written by Brad Laird

In an increasingly complex financial world, the role of a Financial Adviser has never been more valuable. But what does value really mean in Financial Planning? Is it just about maximising returns, or is there more to it? This article delves into the multifaceted role of Financial Advisers, unpacking the tangible and intangible benefits they bring to your financial journey.

1. Behavioural Coaching

One of the greatest benefits of having a Financial Adviser is their ability to guide you through the emotional highs and lows of investing. Emotional decisions often result in poor outcomes, like selling during a market downturn or over-investing during a market rally driven by FOMO (fear of missing out).

Avoiding Costly Mistakes

Take the COVID-19 pandemic as an example: when markets plummeted, many investors panicked and sold their holdings, shifting their money into cash. Not only did the markets recover, but they have since experienced significant gains, leaving those who sold out at a loss. For instance, missing just the 40 best-performing days in the market over a 20-year period could reduce returns by $71,298 on a $10,000 investment. Highlighting how crucial market guidance can be. A Financial Adviser’s role in these situations is to provide reassurance, helping you stay invested and focused on your long-term goals, rather than reacting impulsively to short-term market swings.

*Graph 1: Losses acquired from missing the 40 best days in the Australian Market since 2004. See more* *here*.

Financial Advisers bring market expertise from their regular interactions with fund managers, economists, and portfolio managers. With a steady hand guiding you, you're far more likely to achieve better returns and meet your investment objectives.

2. Holistic Financial Advice

Financial Advisers often bring a wealth of expertise across many areas beyond investments and retirement planning, including estate planning, budgeting, and tax strategies. Their training and experience may enable them to offer advice on a wide range of financial issues, including:

Personal insurance
Tax planning strategies
Superannuation management
Estate planning and wealth transfer
Aged care planning
Budgeting and cashflow
Aged care

Advisers can take a more holistic view of your financial situation, helping you align different elements of your financial plan with your long-term goals. Whether it’s managing debt, preparing for retirement, or safeguarding your assets, an adviser can ensure your financial strategy is working toward your best interests.

3. Tax Efficiency

Tax efficiency is one of the most tangible benefits that a Financial Adviser can provide. Advisers work with you to structure your finances in ways that minimise tax liability and maximise returns.

Strategies for Tax Minimisation

Advisers can implement tax-saving strategies that extend beyond basic deductions, helping to structure finances in a way that minimises tax liabilities and maximises wealth. Advising on tax-effective investment vehicles, like Superannuation, trusts and companies, ensuring your wealth is managed in a tax efficient manner.

Advisers can also help you time the sale of assets to minimise capital gains tax, or strategically use Superannuation contributions to offset gains.

Collaboration with Tax Experts

In more complex situations, advisers often collaborate with tax agents and accountants to ensure your entire financial plan is optimised for tax savings. At Salt Financial Group we are able to assist with this two-pronged approach with our Accounting division, which can help leverage specialised knowledge and navigate complicated tax laws.

4. Access to a Specialist Network

Advisers often do not operate in isolation; they are part of a larger ecosystem of professionals. Through their established networks, advisers offer you access to various specialists, including

Tax agents and accountants (such as our Accounting division)
Fund and portfolio managers
Insurance brokers
Solicitors and estate planners
Real estate agents and property valuers
Mortgage brokers and lending specialists
Aged care experts

When specialised knowledge is needed, whether it's estate planning or property valuation, Financial Advisers can leverage their network of professionals to provide trusted guidance. This access to a broad range of professionals allows your financial plan to be more informed and comprehensive, covering areas that might otherwise be overlooked.

5. Staying Informed: Keeping Up with Industry Changes

The financial landscape is continuously evolving, with new laws, regulations, and financial products emerging regularly. Keeping up with these changes can be a daunting task for individuals, but Financial Advisers are required to stay current through continuous professional development.

This ensures that the strategies they recommend are aligned with the latest regulations and take advantage of any new opportunities that arise. Whether it’s changes to tax laws, superannuation regulations, or investment options, you can trust that the advice you’re receiving is not only accurate but also timely.

6. Education and Financial Literacy

One of the often-overlooked value of Financial Advice is the education it provides. By explaining the reasons behind certain strategies, advisers help clients make more informed decisions and understand how each piece fits into their overall financial plan.

Advisers can simplify complex financial concepts, making it easier for you to understand how different parts of your financial plan fit together. This education often extends to teaching financial responsibility to your children, offering tips on budgeting, saving, and investing. By educating you and your family, advisers help build financial literacy, which can lead to better money management for generations to come.

Budgeting

Many people are unaware of their true spending habits, which can make it difficult to save effectively. Advisers offer valuable insights into spending habits and cash flow, helping clients identify unnecessary expenses and improve their overall financial management.

7. Relieving Financial Stress

Financial stress is often a common source of anxiety. A recent study reveals that almost three-quarters (72%) of adults feel stressed about money at least some of the time, with nearly a quarter (22%) reporting severe financial stress.

Reducing Financial Anxiety

Working with a Financial Adviser can alleviate a significant amount of financial stress. By delegating complex financial tasks to a professional, individuals can enjoy peace of mind knowing their finances are being managed effectively.

Freeing Up Your Time

In addition to reducing stress, working with an adviser saves you time. Financial management can be a time-consuming process, from researching investments to staying on top of tax rules. By managing these financial tasks, advisers help free up time for individuals to focus on other important areas of their lives.

Support Through Life Transitions

Major life events, such as marriage, having children, career changes, or receiving an inheritance, often require adjustments to your financial plan. Financial Advisers provide valuable support during these times, ensuring that your financial strategy evolves alongside your life circumstances.

The value of financial advice extends far beyond investment returns. From helping you stay on track with your goals, avoiding costly mistakes, and reducing financial stress. Their ability to simplify complex matters and offer personalised strategies ensures that your finances are optimise for success. For those looking to take the next step in securing their financial future, consider reaching out to Salt Financial Group to explore how tailored advice can really make a real difference.

The True Worth of Financial Advice