Choosing A Financial Adviser

Hiring a financial adviser can feel like handing your future to a stranger, especially when you’re already under pressure from a big life change. We talk through the moments that commonly push people to seek advice, from starting a family to receiving an inheritance, but the biggest trigger is approaching retirement. What surprised us is how much this timeline has shifted: more Australians are starting retirement planning in their 40s and 50s because the real work happens over decades, not in a last-minute scramble.

We also get practical about what financial advisers actually do. Yes, there’s superannuation advice, investing and retirement planning, but there’s also budgeting, debt management, life insurance, and the role of an adviser as an objective sounding board when family emotions are running hot. We share how to find the right fit, including referrals, the Financial Advice Association directory, and the checks you can do before you meet: Google their name, read client testimonials, and confirm qualifications and registration on the ASIC Financial Advisers Register. We also explain what a good first meeting should look like, and why it should start with your values, goals, and the life you want to live.

Then we tackle the sticky questions listeners always ask: what advice costs and why, plus clear super rules around concessional and non-concessional contributions, the $1.9m total super balance limit moving to $2m from July, work tests after 65, contribution cut-offs around 75, and deadlines like making sure money lands in your fund before 30 June. We finish with a grounded take on high growth investing in retirement and how to think about volatility. If this helped, subscribe, share it with a mate who’s putting this off, and leave us a review so more Australians can find the show.

DISCLAIMER: This podcast contains general financial information only. That means the information does not take into account your objectives, financial situation, or needs. Because of that, you should consider if the information is appropriate to you and your needs, before acting on it. If you’re confused about what that means or what your needs are, you should always consult a licensed and trusted financial planner. Unfortunately, we cannot guarantee the accuracy of the information in this podcast, including any financial, taxation, and/or legal information. Remember, past performance is not a reliable indicator of future performance. The Rask Group is NOT a qualified tax accountant, financial (tax) adviser, or financial adviser. Access The Rask Group's Financial Services Guide (FSG): https://www.rask.com.au/fsg

Transcript

Welcome And Quick Disclaimer

SPEAKER_00 0:00

The Talk Investing podcast and blog discusses investment advice from our previous podcasts and radio shows by Remo Greco and Marco Melado. Learn all things around retirement and investing.

SPEAKER_02 0:19

This is ABC Radio Melbourne and Victoria with Lisa Leon.

SPEAKER_03 0:33

On the money.

Life Changes That Trigger Advice

SPEAKER_04 0:36

So you might have had a big life change. Maybe uh you're starting a family, or maybe you're empty nesting. Uh maybe you've received an inheritance, and you might be contemplating whether it is actually time to get a financial advisor, but you might be a bit stressed about it. So superannuation specialist Marco Mulato is here to give you some pointers. Anything we share here is general in nature and doesn't take into account your personal circumstances, financial situations, or needs. G'day, Marco.

SPEAKER_01 1:06

Hello, Lisa. Nice to be here.

SPEAKER_04 1:08

I mentioned some scenarios as to when you might think about a financial advisor. Anything else?

Why People Plan Retirement Earlier

SPEAKER_01 1:14

The big one is often approaching retirement. So starting to think about what retirement may look like, when it might be, it's pretty confusing, it's pretty complicated. There are a lot of matters that need to be looked at well before retirement. So that's a really big trigger point.

SPEAKER_04 1:31

Hang on. When you say approaching retirement, how many years out might this be?

SPEAKER_01 1:35

So normally we're now starting to see people in their forties and fifties come to see us. Oh wow. Which is a quite a big change. So in uh 15 or 20 years ago it was people in their sixties coming to see us. Now all of a sudden it's people in their forties coming to see us. So clearly the thinking has shifted. There's a lot more impetus on planning over 20 years for retirement, not in the last five. There's a lot of inheritance going on, obviously, as you mentioned. So the transition of wealth from baby boomer to their children is happening, and so that's starting to spark a lot of con conversations around, well, I n I kind of know what inheritance is coming, I don't know when. How should I start to think about that?

SPEAKER_04 2:16

And why do these life changes even require having a financial

Complexity And Adviser Specialisation

SPEAKER_04 2:22

advisor? Trevor Burrus, Jr.

SPEAKER_01 2:23

Ah, rules are complex, right? So just like life is complex, the rules around money and tax and super and investments, it's a new world to most people and they are complicated. And so we're finding that we, even as advisors, we're tending to specialize in very certain areas rather than being in the old days, we're a bit of a GP, right? We s we knew a we knew about a lot of things and we could talk to our clients about a lot of things. I think as things have evolved and become a lot more nuanced, we find a lot of advisors are now specializing in certain areas. And so you kind of have to try and match that up with what you need so you get the right advisor.

SPEAKER_04 3:03

And when we are talking about financial advisors, who's in that bucket?

SPEAKER_01 3:09

Of financial advisors. Yeah.

What Financial Advisers Actually Do

SPEAKER_01 3:11

Okay, so it can be a bit of a broad term, and I guess people don't really know what financial advisors do other than most people think, well, they're probably going to help me invest, they're probably going to help with my super, and they're probably going to help with some retirement planning. But but what does that mean? So if we get down to the nitty-gritty, financial advisors can do things like help you with your life insurances. If you're young and you have debt and you have family, they can help you with your budgeting, they can help you with how to manage debt, they can help you with all the various investments you have. It's not just super or shares. There's lots of different types of investments. They can help be a bit of a sounding board. So just for good smart financial choices. It may not be action related, but it may be, hey, you know what, my kids are thinking about this, what do you reckon? So we're often acting as a sounding board to our clients for them and their children, just as a bit of a you know, an object an objective voice that's not really emotionally attached to what's happening in the family. So we're really, really away from that. And I think clients appreciate that, someone to talk to that they can trust.

SPEAKER_04 4:19

So

Finding An Adviser You Can Trust

SPEAKER_04 4:20

how do we start this process?

SPEAKER_01 4:22

Okay, really good question. So I I don't think it's too different to looking for anyone that you think needs to help you in a professional way. And so we often see a lot of clients that walk into our business having been introduced by perhaps an existing client. So talk to your family and friends, talk to work colleagues, talk to people that you know that you trust, that you have, you know, some respect for, and they might tell you about some really good experiences they've had with an advisor. So that's a great place to start, and that's really the most common. You can go to a website called or an institution's website called the Financial Advice Association. So they represent advisors in a number of ways. They also have a find a planner service, so find a financial planner. Those advisors, we've all been vetted, so we're all legitimate, we've all got the credentials, we've all got the experience. You can't be on that website unless you have all of that pretty much nailed, and you also haven't really had any breaches, right? So you haven't done anything untoward. So that's another good place to go to. And then we are seeing some social media groups. So there might be some investing groups or retirement groups on certain uh apps or certain networks. And you can join those and start to get familiar with some of the terms and some of the some of the issues that people are thinking about. And then when you're comfortable, lots of people ask for recommendation. You know, who who do we think in the Melbourne area can advise on XYZ? So that's all a pretty good start. That I guess opens the door to how you start to find advisors. And then there's step two, which is right, when you're ready to start seeing them, what should you be looking for? When you when you go and see an advisor and sit in their office and have a discussion, what do we think the process should be like?

Research Checks Before You Meet

SPEAKER_04 6:11

Well, how much research are we also doing? So we're talking to our family and friends, but how much desktop research are we doing on our financial advisor before meeting with them?

SPEAKER_01 6:19

Yeah, so I think as much as you can. So you're looking at obviously their website, but I'd be doing things like just Googling their name. So if it's an individual advisor, and you should find things that pop up, like they may have written an article or a blog, uh, they might have been on a show. We should be looking for client testimonials. I think that often gets missed. But you know, if advisor is good at what they do and they're confident and their clients are satisfied with the advice, a testimonial will kind of prove that, right? And so the clients are happy to put their name to their experience.

SPEAKER_04 6:52

Aaron Powell And what sort of credentials should we expect to see as well? And where do we check that?

SPEAKER_01 6:57

Yeah, so you you go to the ASIC website where you can put in the advisor's name and that will return what credentials they have. And you're looking for very specific qualifications. So you want them to have been or have done uh a qualification in finance or financial planning itself, and then you're looking for years of experience. So I think that matters. And you know, when you get to see them, I think the next step to that is not just years of experience, but where has the experience been? Have you been advising 30 and 40-year-olds for the past 10 or 12 years? Great, okay, if that's your cohort. Have you been advising retirees? It's a very different skill set, I think, uh most times to advise a different cohort. So I think that is good. And then also you're looking for some uh I guess industry associations. So certified financial planners, a bit like a CPA or a chartered accountant in the accounting world, and maybe some additional qualifications that have just it just shows you they're stepping up a bit higher than what the you know the simple benchmarks want them to be.

SPEAKER_04 8:02

And

Preparing For The First Meeting

SPEAKER_04 8:03

how should we prepare for that first meeting and are we paying for the first meeting?

SPEAKER_01 8:06

So first meetings generally are not gonna be paid for by by the client. They're generally borne by the firm. Should we prepare? Yes, absolutely. You y what you really want is an advisor that then comes back to you after the first conversation before the meeting and says, right, in our meeting, these are the sorts of things we're gonna cover. We'd like to know a lot about you before the meeting so that we can prepare. And so generally what we'll do is send out a whole bunch of questions that gets the client really thinking about what's important to them, and then ask for a whole bunch of data as well. So that we want that back generally a week before the meeting gives us a lot of time to prepare, get to know them pretty well before we've met them. So you're starting immediately in that first meeting with a with a good you know, good grounding of who they are and what they're looking for, which means it can be a lot more productive.

SPEAKER_04 8:57

And what are you looking for in that first meeting then?

SPEAKER_01 9:00

So we're real we're really trying to get a feel for who they are. So even before we get to how much money they have in the bank, what their super balance is, we need to know who they are. It's a bit like where they've come from, where they are now and where they want to go. Sounds a bit wishy-washy, but it's true because often objectives may have a number around them, but really that number enables them to do something. So it's not necessarily about hitting a number, a retirement number or a lump sum number. It's about the life they want to live. So how do we get them to live their best life and then we work backwards from there.

SPEAKER_04 9:37

And

The Questions They Must Ask

SPEAKER_04 9:38

if the financial advisor isn't asking those questions, should we be worried?

SPEAKER_01 9:42

Aaron Ross Powell I'd be a little I'd be a little bit worried about that. Yeah, I'd be concerned. I'd be thinking things like, well, what what are they actually interested in? Why are they not asking those questions? Do they have enough experience? Are they really just interested in getting my money and investing it and charging me a fee? So I uh advisors should be doing a lot more listening and questioning in the meeting rather than talking.

What Advice Costs And Why

SPEAKER_04 10:06

And then, you know, this question of how much should we expect to pay a financial advisor? I think people are really worried that they're just going to end up paying more money than they, you know, should uh for advice that isn't that helpful. Trevor Burrus, Jr.

SPEAKER_01 10:18

Yeah, this is a bit of a pain point in the industry. So we are we are burdened with compliance. I think that's fair to say. And there is a huge amount of work we have to do to be able to deliver advice. That takes a lot of time, a lot of staff, a lot of systems, a lot of research. And so as a business, you kind of have to make sure you can cover those costs and then have some profitability after that, otherwise there's no point being a business. So it's expensive, it's not cheap. And so the government is trying really, really hard to try and fix this problem. They haven't yet. I suspect they will make some changes over the next three or four years that will help. But if we talk in terms of numbers, for a client to receive initial financial advice, which is quite involved, so it's taking into account all of their circumstances, investments, super, income, insurance, perhaps some estate planning or intergenerational planning. If it's that whole comprehensive box and dice, it's probably three or four thousand dollars up front to have that advice delivered. Now, is it valuable? It should be very valuable, so it's a great investment into that. But we understand it's a lot of money. It's not tax deductible, it's considered a capital cost, so it's a big hit up front. You should see, though, when you receive the advice, enormous amounts of value in it. And so once you see that, you'll understand where the three or four thousand dollars is coming into play.

Super Contributions Limits And Age Rules

SPEAKER_04 11:46

We have Fred from Melton on the line waiting patiently. Hello there, Fred.

SPEAKER_03 11:52

Good morning, and thanks for taking the call. Just to ask some very brief questions about voluntary super contributions after tax. Number one, is there a total super balance limit under which you can and over which you can't make these contributions?

SPEAKER_01 12:12

Yes, so that's currently 1.9 million. It's going to two million as of July.

SPEAKER_03 12:19

So if uh someone was uh over that total super balance and yet they're uh they're uh super app if they'll make those contributions. That app is an error, I guess.

SPEAKER_01 12:33

Uh did you say super app?

SPEAKER_03 12:36

Yeah, uh an app or a uh a super you can still make a thirty thousand contribution.

SPEAKER_01 12:44

Yeah, so I think so. Let's just clarify a couple of things, just maybe for the listeners. So the $30,000 limit is called a concessional limit. So that's the bit that uh you get a tax deduction for or when you salary sacrifice. Uh there's no limit related to that in terms of your superbalance. So you can have any superbalance you want. You you can make that $30,000 contribution and claim a tax deduction. You're not restricted. The other type of contribution, which is the after-tax non-concessional, so there are no tax deductions for that, that is where the $1.9 million superbalance comes in. If we have over $1.9 million in super, we're just knocked out. We can't make those big non-concessionals. That goes to two million next year, though, all just as of July, so around the corner. So there's a difference in the type of contribution and there's a difference in terms of what your super balance applies to.

SPEAKER_03 13:40

Thank you. Um so the uh before a tax contribution, is there a limit by age? You have to pass a work test to make it.

SPEAKER_01 13:47

Yeah, good question. This is a really good question. So the the age limit is really sixty-five. So up until sixty-five, there are almost no rules. You you can contribute to Sumer and claim a tax deduction, it's pretty simple. From sixty-five to sixty-seven, they like to make this complicated. So between sixty-five and sixty-seven, you have to meet a work test. Uh so that work test is forty hours in thirty uh consecutive days. So it's it's not a significant work test to me, but they just like to put these little things in there to make sure you're trying to do what they want you to do, I guess, in terms of the tax office. But so up to sixty-five, pretty free, lots of freedom to make those tax-deductible contributions. Between sixty-five and sixty-seven, we have to meet this work test.

SPEAKER_03 14:37

And uh there's uh some sort of limit at seventy-five, is there, or am I not reading that correctly?

SPEAKER_01 14:43

Yes, so seventy-five is the the age limit at which you cannot make any contributions at all, other than if you're working and your employer is making some SG payments. So that eleven and a half percent they make. But from 75 onwards, in fact, I'll tell you I'll tell you another little quirky thing about it. It's actually it's actually up to twenty-eight days in the m following month that you turn 75. So that's the latest day or point in time that a contribution can go in from you personally. So if you turn 75 in January, for example, you actually have until the twenty-eighth of February to make that contribution. Post that date, we're locked out.

SPEAKER_04 15:29

Thank you, Fred. Uh I've got

Deadlines, New Taxes, High Growth Risk

SPEAKER_04 15:31

a couple of quick texts here, Marco. Uh when do you have to make a contribution to Super to get the government top up for low contributions? Is it June 30 or earlier? Thanks, says Tez.

SPEAKER_01 15:42

Yeah, so that that is 30th of June. So just be aware the contribution has to be in your fund by the 30th of June. So if you make a contribution on the 30th of June, it's probably not going to get into your fund. And I think I have to double check, but I think the 30th of June this year is a Monday. So you've got the weekend before that. So you want to be doing it well before 30 June, so that it it lands into your fund before 30 June, just to make sure you've you've met the timeline.

SPEAKER_04 16:11

Does the proposed super tax legislation over three million dollars include account-based pensions? That's Neil Bourne.

SPEAKER_01 16:19

Yes, it does. Yeah. So it's it applies to your entire super balance, whether it's in accumulation or pension phase. So there's going to be a lot more people caught by this than we think.

SPEAKER_04 16:29

All right. Now this one we're going to have to take as a general one. So a net rights. I've just rolled my super into a pension account. I have maintained it in high growth fund. I did watch the super earlier when it dropped about $30,000, but the account has now regained most of that. I am 68, hoping to keep money in high growth for a few more years. I understand that all funds lose and gain, whether in balanced or high growth. Is there something I am not taking into account by this strategy? Marco?

SPEAKER_01 16:58

Okay. So we we could talk lots about this, but let's try and keep it fairly simple. So a high growth option probably means our balance is exposed to share markets quite a bit. So something like 80 to 90 percent exposed to share markets. So you are going to wear pretty much the direction of the share market. Your balance is going to f follow the direction of share markets. And so if we look at just April, we had markets go down pretty viciously and pretty aggressively at the beginning of April. And that was uh they were already heading down, but really Trump Liberation Day was the catalyst for that. That was in the first two weeks of April. In the final two weeks of April, we've recovered all of that. We call that a V-shaped recovery. And that's just in one month. So that volatility was enormous. We haven't seen that probably since COVID, uh GFC days. So if you can handle that kind of volatility, uh you're probably going to get the biggest returns long term. If you cannot handle that kind of volatility, it's probably not the options you should be in.

SPEAKER_04 18:05

Thank you. Thank you, Annette, for

Final Thanks And Sign Off

SPEAKER_04 18:07

that. And thank you again, Marco Mulato. I hope you'll come back soon.

SPEAKER_01 18:10

My pleasure, thanks, Lisa.