A guide that contains information about the entity providing you with financial advice, the financial services offered, fees charged and how the person or company providing the service will deal with complaints.
Our Financial Services Guide comes in two parts that must be read together:
Part 1(AUPFS) tells you all about our licensee Australian Unity Personal Financial Services Limited and how the person or company providing the service will deal with complaints. Part 2 explains the services offered by, and fee structure for your Financial Adviser, John Hockey or Andre DiMatteo.
A Product Disclosure Statement or PDS is a document (or sometimes a group of documents) that contains information about a financial product, including any significant benefits and risks, the cost of the financial product and the fees and charges that the financial product issuer may receive.
A financial adviser or financial adviser, is a professional who suggests and renders financial services to clients based on their financial situation. Many financial planners offer a complimentary introductory meeting as we do. The introductory meeting is your opportunity to make sure that you feel comfortable with our professional standards, and that you get on well with us. Financial planning is a relationship business and not just a one-off meeting. We implore you to ask plenty of questions at every opportunity. Sometimes our clients say, they don’t know what to ask as they don’t know what strategies are available, so that is where we listen, review and investigate and develop a plan that we discuss with you awarding the merits of each recommendation. Many are tax driven recommendations and future financial well-being principles.
A financial adviser can help with savings goals, for example, starting from a zero base at what age, how much do I need to save to retire at age 65 and live on $52,000pa for 25 years..?
Age 25, needs to save close to $850pm for 40 years to have a retirement nest egg of $1,297,000 at an average earning rate of 5%pa, not taking into account, fees, taxes etc.
Age 30, needs to save $1,150pm for 35 years to have a retirement nest egg of $1,306,000 at an average earning rate of 5%pa, not taking into account, fees, taxes etc.
Age 40, needs to save $2,200 for 25 years to have a retirement nest egg of $1,310,000 at an average earning rate of 5%pa, not taking into account, fees, taxes etc.
The only problem with all of these scenarios is that the government wants (as its law) for you to take out 5% at 65 and 6% from age 75, 7% from age 80 and so on, so they may make you take out more than you need, so what do you do with the excess..?
There are various ways to structure fees, and it typically starts with an initial fee to identify your needs, develop a strategy and implement their recommendations. There could also be administration and ongoing service fees for regular reviews of your plan. The average ongoing fee for a professional financial adviser’s services is around 1.00%pa of funds under management (FUM). For an account of say one million dollars or more, rates are negotiable in relation to the amount of work required initially and then ongoing. Clients can also Opt for a ‘Fee For Service’ which is an annual fixed fee, so no matter if your portfolio goes up or down, the fee stays the same and is re-negotiated each year.
We are happy to negotiate either a Flat Fee or a percent of FUM, our fees are based on the amount of work we do for you in implementing the ongoing recommendations, caretaker and advisory role.
Financial advice can be paid for directly from your bank account, though many clients opt to have the fee taken directly from their superannuation accounts if it is superannuation, investment advice and retirement goal orientated. You have received a tax deduction for money you contribute into superannuation, so when you take that into account the ‘actual advice fee’ can be more tax effective. If you are invoiced separately, then only a part of that fee may be deductible, so it is best to discuss this with your financial adviser and/or tax accountant.
Financial advice typically costs around 1 percent of your portfolio per year and drops as your total funds grow. So, yes, people want to know if they are getting what they pay for… Not everyone wants or needs a financial adviser. About one-quarter of private investors are truly “self-directed,” according to Vanguard.
Here are some questions you may not have thought of, as they are somewhat more technical or as above, we don’t know – so how do we ask these questions..?
When you start off considering that around 1 in 3 Australians will live past age 90.., which means you have plenty of time to spend your money, will you however, have enough time to save before retirement without a meticulous plan now?
Q. If I had $1.6million in my Superannuation Account at retirement at age 65, how long will it last?
A. You have to take 5% out at age 65, on $1.6millio that is $80,000pa, which may run out at age 83 earning 3%, without Centrelink
Q. What if I want only $52,000pa?
A. You then re-invest the excess
Q. If I retire at age 70, with $1.6million will that make much difference on how long my funds will last?
A. This should push the time out to around age 88
Q. What does the phrase ‘lower for longer’ mean?
A. You can expect lower returns for longer due to the current economic cycle
Q. When my superannuation/pension accounts starts running down, when can I start receiving the Centrelink Aged Pension?
A. As soon as you Assessable Assets or Income fall below the Upper Centrelink Thresholds, these numbers are indexed each quarter, so will vary
Q. If I had only $500,000 in my super at age 65, how’s that look drawing say $52,000pa?
A. Your funds will run out around age 83 without any Centrelink support
Q. How much will Centrelink support help my superannuation last?
A. That is more complex than it seems, we would need to run a scenario through our modelling software to advise you, please call or email our office.