What should you ask your fund's financial adviser?
A useful snapshot to help you prepare for a meeting with your superfund's financial adviser.
Helena asked, in The Epic Retirement Club Facebook Group, “I have an appointment with my financial planner from my fund this week. Can anyone give me some guidance on what questions I need to ask to make the most of my appointment?”
What an excellent question. I think you also need to ask, “What do I need to prepare before I visit to really get useful answers?”
Let’s look at both questions today.
Before you go and see your fund’s financial adviser, it’s a good idea to have three things prepared, otherwise you might find your appointment spends more time speaking hypothetically than you’d like:
A ‘big financial picture’ for your household. Think of this like a budget on steroids. I want you to document your assets, your liabilities, your income and your expenses. And I want you to be able to comfortably discuss your household’s ‘burn rate’, that is, how much money you need to spend every month and every year on your basic cost of living to be comfortable.
Your goals, written down. Yep, you need to start to build a picture of what you want your life to look like. If you don’t you’re really going to the adviser to ask ‘what’s possible’ and you might get a relatively canned response. I know I sound cynical, but I want you to be in the driving position of this appointment. So I want you to have thought about the destination you want to get to, before you jump into the car.
A review of your fund’s performance against benchmarks – comparing investment returns and fees. Don’t wait for your financial adviser (who probably works for your fund) to tell you how your investment choices are performing. Get out your statement and have a look. Compare your fund’s performance with the 3, 5 and 9 year performance of funds on the Your Super Comparison Website run by the government. That way you can ask questions with insight up your sleeve. And make sure you benchmark your fees against other funds in the same risk-level.
Then, once you’re in the appointment, here’s a helpful list of questions you can cherry-pick from, or even print out and use, to make sure you think of the things you want to discuss.
Retirement goals
What steps should I take now to make sure I hit my retirement goals? (Note this relies on you coming in with some goals!)
How much should I aim to have in my super by the time I retire so I can feel confidence? (They will need to see your budget to understand what you need to spend to live comfortably!)
Based on my current financial situation, what’s the ideal retirement age for me? Can you explain why you believe this? (Again, they will need to see your big financial picture and your goals to understand if you can achieve these both and assess how much money you’ll need and how long it will take you to save or grow it through compounding.)
Superannuation Contributions:
Are my current super contributions enough?
Should I consider salary sacrificing or making extra voluntary contributions?
Are there any government co-contributions or tax benefits I should be taking advantage of?
Investment Strategy:
How are my investment choices performing? Hows that tracking against similar funds?
Is my current investment strategy suitable to achieve my retirement goals?
Should I adjust my risk profile or diversify my investments within my super?
How often should I review and potentially tweak my investment strategy - can you guide me on this?
Insurance Coverage:
Do I have the right level of insurance coverage within my super? Can you explain why you believe that is the case?
Should I think about adjusting my life insurance, TPD cover, or income protection?
Fees and costs:
What fees am I currently paying for my super account?
Are there ways to reduce these fees without compromising my investment returns?
What services can I access for these fees?
Retirement planning:
What are my options for generating income from my super when I retire?
Can you project some retirement income scenarios for me?
How can I ensure my retirement income will last throughout my retirement?
The Age Pension
Will I likely be eligible for the Age Pension or other related concessions?
If so, at what point will I likely become eligible and how much age pension will I likely be entitled to?
Retirement Bonus
If planning to retire, am I eligible for a retirement bonus?
If so, approximately how much will it be?
What are the terms on which it is offered?
Tax implications:
What are the tax implications of my super contributions and withdrawals?
Are there any strategies to minimise my tax burden now and in retirement?
Estate planning:
How should I structure my super to ensure it aligns with my estate planning goals?
Are my binding and non-binding death nominations up to date and appropriate?
Contingency planning:
What should I do if there are significant changes in my financial situation before retirement?
How can I prepare for potential financial emergencies?
General finances:
Are there other areas I should look into to support my retirement strategy?
Can you recommend any additional resources or tools to help me stay on track with my financial goals?
Are there any useful calculators or apps that I can learn more about?
These questions should be MORE than enough to choose from. Remember, not every appointment with a super fund financial adviser will cover this much detail. Many appointments will only deal with one or two more specific issues. But it never hurts to be prepared!
There’s a detailed overview of all these things in my book, How to Have an Epic Retirement, which is available on Amazon here.
And, while you’re there, tell your fund I sent you and say “Hi!” from me.