Financial Planning

The Financial Planning Association (FPA) defines financial planning as the process of meeting your life’s goals through the proper management of your finances. Your life’s goals may include buying a home, saving for your children’s education and planning for retirement. 

 

A good financial plan as suggested by the Australian Investments and Securities Commission (ASIC) should: 

  • Summarise your financial position 
  • List your goals
  • Explain how you will reach your goals
  • Show how carefully chosen investments mesh together as working parts of your overall strategy
  • Disclose and explain any risks and how they can be become
  • State all the costs
  • Reveal the commissions your financial planner might receive from the investments they recommend

Benefits of financial advice

Quality financial advice can help you make informed decisions about your financial situation.

 

A PGFS financial adviser can help you determine your short and long term financial goals and suggest solutions to achieve them.

 

Benefits of financial advice include:

  • Helps protect and build your income or investments
  • Assists you to plan major changes in your personal circumstances e.g retirement
  • Accurate information about changing laws and investment markets
  • Notification and access to new investment opportunities
  • Gives direction and meaning to your income or investments
  • Opportunity to build a relationship with an professional
  • Access to up to date research and market insights

A PGFS financial adviser can help you determine your short and long term financial goals and suggest solutions to meet them.

How does a financial adviser help you?

The Financial Planning Association (FPA) suggests a financial adviser can assist you:

  • Develop a sound financial plan
  • Make your money work to your best advantage
  • Suggest financial products that are tailored to your needs
  • Educate you to understand risk and determine your personal risk profile

Thinking you need advice?

You may need advice if you:

  • Have a complex financial situation
  • Have been made redundant
  • Have a portfolio and you’re looking to build a strategy or plan
  • Don’t have the time of knowledge to manage your portfolio on an ongoing basis
  • Have received an inheritance or windfall
  • Have received a lump sum
  • Are new to investing and want to turn your savings into investments
  • Are changing jobs
  • Are nearing retirement
  • You want to make sure your family is protected if something happens to you or your partner
  • You are single again after a long relationship, due to divorce or the death of your partner
  • You are starting a new business
  • You are planning a major life change such as marriage or retirement or moving house.

Who doesn’t need help? Source FPA

Not everyone needs advice. If you are confident that you have an effective strategy in place, then you may not need professional advice. For example the FPA says:

  • If you want to deposit some money for a short period in a term deposit or cash management account, or another investment with a guaranteed return.
  • If you just want someone to carry out a share transaction for you. In that case, the Australian Stock Exchange (ASX) can refer you to a qualified and licensed stockbroker. Call 1300 300 279 or visit the website www.asx.com.au
  • The decision is yours, but if in doubt, it is wise to have the benefit of financial advice.

How much does financial advice cost? Source FPA

There is no set amount that a financial planner will charge. It depends on how complex your financial situation is and the level of service that the financial planner provides. Some planners may charge you directly for their services: others may be reimbursed by their employers or by the providers of products that you may invest in. Many will not charge you at all for the first meeting. Check their Financial Services Guide (FSG) for details. Your financial planner will prepare a Statement of Advice which will detail all fees and charges payable to the planner.

Shares, Property or Managed Funds

Shares

Shares are easily traded, which makes them a flexible investment. However, with the potential for high returns comes higher risk. The value of shares can fluctuate significantly, so they should be monitored. They generally are suited to longer-term investing.

Property

You can invest in property in two ways.

  • Directly – where you buy real estate.
  • Indirectly – where you invest in a fund, such as a property trust, which uses pooled investor funds to buy real estate.

Property is typically best suited to investors who plan to keep their investment for more than five years.

Managed Funds

A managed fund pools the money of many individual investors. This money is then professionally managed according to the investment objective of each fund. By investing in a managed fund and pooling your money with other investors, you can take advantage of investment opportunities that you may not be able to access as an individual investor.

 

When you invest in a managed fund, you are allocated a number of ‘units’ based on the entry unit price at the time you invest. Your units represent the value of your investment, which will change over time as the market value of the assets in the fund rises or falls.

How do I choose?

It is lilkely that a mix of all three of the above asset classes would be used to represent your investment objectives and align with your risk profile. A PGFS Financial Advisor can asssist in determining the appropriate weighting of each asset class.

Payment of Benefits

When can I access my benefits?

Generally, you must reach your preservation age before you can access your super. Use the following table to work out your preservation age.

Preservation age is not the same as pension age. Pension age is when you become eligible for government pension benefits, depending on your income and assets.

There are three super benefit categories:

  • preserved
  • restricted non-preserved
  • unrestricted non-preserved.

There are rules for how you can access each category. There is no requirement for the fund to pay these benefits once a member reaches a certain age. Benefits need to be cashed as soon as practicable after a member dies.

Preserved benefits

Generally, you cannot access preserved benefits from a super fund or retirement savings account until you have satisfied a condition of release.

Restricted non-preserved

As long as your employer or your employer’s associates have made superannuation contributions on your behalf, your fund can pay you restricted non-preserved benefits if that employment is terminated. They can also pay you under the same conditions as preserved benefits.

Unrestricted non-preserved

These are benefits you voluntarily kept within the super system after you met a condition of release. If the super fund rules allow the payment, your fund can pay you these benefits at any time on demand, regardless of your:

  • age
  • employment situation
  • financial position.

Conditions of release

You must meet a condition of release before your super fund can pay you a benefit. Your fund can only pay benefits if the fund’s rules allow it.

 

Your fund can pay your benefits under the following conditions of release, provided the fund’s rules allow it:

  • retirement
  • transition to retirement
  • attaining age 65 or more
  • your benefits are less than $200
  • terminating gainful employment
  • terminal medical condition
  • permanent incapacity
  • temporary incapacity
  • compassionate grounds
  • severe financial hardship
  • release of benefits under an ATO release authority.

There may be restrictions as to how the benefit may be paid.

Accessing your super before you retire

You can only access lump sum super benefits before your preservation age in very limited circumstances. For example, if you:

  • need to meet expenses associated with a medical condition or other compassionate grounds
  • are experiencing severe financial hardship
  • are a temporary resident departing Australia
  • have a terminal medical condition.

Compassionate grounds

You must send your application to the Australian Prudential Regulation Authority (APRA) if you want to access your super benefits early due to compassionate grounds.

Terminal medical condition

If you have a terminal medical condition, you can apply to your super fund to access your super benefits tax-free, regardless of your age.

The final decision to release your super benefits is subject to the rules of the fund.

Transition to retirement

Once you reach your preservation age, you can access your super before you retire but only in the form of a ‘non-commutable’ income stream, not a lump sum.

 

This means, if you are 55 years old or over, you can reduce your working hours without leaving your job or reducing your total income. You can top-up your income with a regular income stream from your super savings.

Contact Information

 

Adelaide

Address: 1 King William Road

Unley, South Australia 5061

Email: admin@pgfs.com.au

Phone: 08 8373 7277

Fax: 08 8357 0366

Facebook: PGFS

Darwin

Address: Suite 13. Terminal 1

396 Stuart Highway

Winnellie, Northern Territory 0820

Email: admin@pgfs.com.au

Phone: 08 8373 7277

Fax: 08 8357 0366