Financial Planners

If you are looking for a financial advisor in Perth, you have probably noticed that there are a lot of choices out there. Financial advisors are bound by a concept called “duty of care.” The concept of having a “duty of care” is communicated in many different ways by statutes involving the provision of financial advice.

What is “Duty of Care”?

“Duty of care” basically means that your financial advisor is required to look out for your best interests and inform you of developments that may increase the risk of any investment they have recommended to you.*

Swan and Baker Pty Limited vs. Marando

It is best illustrated by a decision which was upheld by the NSW court of appeal last year: Swan and Baker Pty Limited vs. Marando. A financial advisor and the firm he worked for were accused of misleading and deceptive conduct by two investors. They were also accused of a breach of professional duty because they had provided negligent advice.*

In 2008, Mr and Mrs Marando invested $500,000 in the City Pacific Ltd Mortgage Fund on the advice of accounting firm Swan & Baker. The funds were to be invested for 90 days and available for reinvestment after the term had elapsed. Swan & Baker gave the Marandos a copy of a document called the Fund Product Disclosure Statement. Within the statement was a 14-day “cooling off” period that applied to new investments.*

The Financial Planning Association of Australia (FPA) cited a recent Government document as confirmation that all Australians need professional financial advice. As a firm that has provided financial planning help in the Perth area since 2005, we have always felt that a good financial planner can make a difference in anyone’s future.

2015 Intergenerational Report

The document in question is produced by the Treasury: the 2015 Intergenerational Report (IGR). According to the IGR, life expectancy will increase greatly in the next forty years. At birth, men are projected to have a life expectancy of 95.1 years, while women can expect to live 96.6 years. Today’s life expectancy at birth is 91.5 years for men and 93.6 years for women.*

The end result is that, by 2055, the ratio of working Australians to those who are over 65 will be 2.7 to 1. Today, that ratio is 4.5 to 1. In 1974/75, for comparison, it was 7.3 to 1.*

Mark Rantall, who is the FPA’s CEO, feels that it will be important for Australians to maximise their superannuation funds to rely less on age pensions. According to Mr Rantall, “The IGR makes it very clear that [those with higher superannuation savings are less reliant on age pension].”

If you work with a financial advisor in our Perth office, one of the first things you will probably be asked to do is to figure out your monthly expenses. There is also a pretty good chance that your financial planner will advise you to create a budget.

Knowing monthly income and expenses is one of the first steps to getting a handle on your financial situation. The better you are at this, the easier it is for a financial planner to provide you with your desired results.

Why Track Spending?

Usually, when someone tracks their spending accurately, it is a true eye-opener. They usually find a lot of surprises and have no idea they were spending so much money on entertainment or any of many other things. Accurate tracking allows you to see exactly what you are spending instead of guessing based on what you want to remember.

What to Do

Spending is easily tracked on your smartphone. Both iPhone and Android have plenty of apps to help you easily and accurately track every bit of money you spend. If you don’t like any of the apps, you can create a spreadsheet or just use a piece of paper.

Financial advisors in Perth are nearly ubiquitous. There are seemingly so many financial planners around that we can get “placed on the back burner” by many. As a result, people who have worked hard to make a good amount of money may just be letting their money sit in bank accounts and making a minimal amount of passive income.

Our Process

At Approved Financial Planners, we make it easy for you to invest. We require an individual consultation and some basic information. We will assess your risk tolerance. When we have taken all of your individual factors into consideration, we will devise a financial plan that makes sense for you.

We will present that plan and with your permission, execute it for you. You spend minimal time and effort but are able to reap the benefits of our financial planning. After we know what you want, we can research investments for you and do all of the paperwork. That means all you have to do is sign the documents.

At Approved Financial Planners, we help minimise your market risk by diversifying your investment portfolio. We do check in on a regular basis so that we can adjust your investment strategy to fit your goals, current lifestyle and financial situation.

At the beginning of the year, most of us reassess where we are in life and make resolutions. This is especially true when it comes to financial planning. Financial planners in Perth are quite busy at this time of year, helping our clients reassess and re-calibrate their goals.

This year, many of the questions revolve around falling oil prices: how long they will last and how they will affect our economy. We recently found a piece in the Sydney Morning Herald that contained a nice summary of current information along with quotes from some respected economists.

The Fall in Oil Prices: How Big is It?

On 19 June 2014, the price of oil was $115 USD per barrel. As of 13 January 2015, the price has fallen to $47.43 USD per barrel. Consequently, Societe Generale and Goldman Sachs have both lowered their oil price forecasts.*

When oil prices fell in the 1980’s and 1990’s, there was a rise in the US economy. This resulted in a corresponding rise in both the global and Australian economies. This has caused many fund managers to predict rising share prices for the latter portion of 2015.*