“I wish I did this 5 years ago.”

This sentiment often arises during the initial meeting when discussing how we can assist clients and explaining the financial planning process.

Main Points:

Clients often grapple with a multitude of thoughts regarding what they do, should or shouldn’t do, what they know or think they know, and what others have been telling them. This mental clutter can be paralysing, making it difficult to prioritize financial planning, ultimately causing it to be put on the back burner.

Recommendation: Take the first step by scheduling an initial meeting. Even if nothing else, this alone can provide significant value.

“What return can you get? This is what my super or investments did last year; can you do better?”

It’s not a bad question to ask, but I suggest framing it as a bit of a trick question. Past performance does not indicate future results, and any response other than “I don’t know” or “It depends on…” should raise caution.

There is no way to predict future investment returns accurately. While it’s a reasonable question, the only reasonable answer is “I don’t know” or something similar. Returns for many clients will align with market trends, adjusted for their risk levels. Diversification may sometimes lead to investments in areas that underperform, a reality for smart, long-term investors.

Be cautious if an advisor guarantees specific results, claims they can “beat the market,” or promises outperformance. This could indicate overconfidence or a willingness to make exaggerated claims to attract new clients.

“How much do I need to retire? How much do you need to live? It’s about income, not capital.”

For example, earning $100k but needing only $50k to retire demonstrates the importance of aligning financial goals with income needs.

Questions Clients Should Ask:

“How have you helped other people like me?”

Financial planners can provide advice across various areas or specialize in specific employment sectors. It’s wise to ensure that the person you are talking to has expertise relevant to your needs.

“What’s your history? How long have you been providing financial advice?”

The industry has undergone many changes over the years, including regulatory and educational shifts. Someone who has weathered these changes has a sturdy foundation in the business. When entrusting someone with your retirement savings, dealing with an advisor who has provided advice through periods of uncertainty, such as the Global Financial Crisis, 9/11, Y2K, can install confidence.

Click below and listen in as Paul chats with John Mackenzie live on 4CA Cairns: