Ask the Expert: Finding a financial adviser and boosting super with inheritance

Financial advisers are ideal for long-term  planning around retirement, investment portfolios, goal setting and budgeting.

Financial advisers are ideal for long-term planning around retirement, investment portfolios, goal setting and budgeting. Photo: Getty

Question 1

  • Hello, would you please recommend a financial adviser who has a good rating?

This is a popular question but one that’s not that easy to answer.

Firstly, only licensed individuals who have met education requirements and who have passed an exam are legally allowed to use the term ‘Financial Adviser’ or ‘Financial Planner’.

Once you know who you are going to see, check their details out and ensure they are registered by typing their name into ASIC’s Financial Adviser Register.

Historically financial advice grew out of the life insurance industry and many advisers would base their business model on being able to recommend high-performing investments.

However, there are two problems with this.

Firstly, it’s not that easy to do consistently, and secondly, clients value other issues which are far more important to them.

Morningstar conducted a survey that had some interesting results in what people what in a financial adviser. Visual Capitalist has a summary here.

A good financial adviser should be able to help you articulate and set financial goals, provide recommendations on strategies that will then help meet your goals, and provide coaching and personalised service along the way.

This then brings us to what you are looking for from a financial adviser.

If you just want help to get your super organised, then many super funds provide financial advice at no additional charge to their members.

These advisers still have to be registered on the  Financial Adviser Register.

They can advise on items such as which investment option to invest in, how much to contribute, or advice on the insurance you hold within super.

For more comprehensive advice on setting a long-term financial plan around retirement planning, comprehensive insurance, investment portfolios, goal setting and budgeting, then seeking out a financial adviser is the way to go.

Often asking family or friends if they have had a good experience, or otherwise, with a financial adviser is a good place to start.

Additionally, I would look to members of the Financial Advice Association of Australia, Australia’s largest professional body for advisers (disclaimer, I am a member of this association).

In terms of ratings, you can see if the adviser has been rated by other consumers on the Adviser Ratings website.

Many advisers do not charge for their initial appointment so this could be a good opportunity to shop around and see if you feel a good connection to them.

They will also provide you with a Financial Services Guide (FSG). You should review this to ensure the services they provide match what you are after.

Finally, many financial advisers offer an ‘ongoing service’.

These can be costly and are not always needed, so remember they are not mandatory.

You may only need one-off advice every few years. However, some clients do like partnering with financial advisers over the long term and being in regular contact, so depending on your situation, you may find value in that service.

Question 2

  • I am almost 65 and receiving a reduced JobSeeker allowance due to a small but regular income. I am about to receive an inheritance of $400k which, as a single, puts me above the threshold for receiving JobSeeker. I have a very recently started super account of about $30. Can I put some money into this account and still receive JobSeeker until I reach pension age?

Yes, this is a very common strategy. By making a contribution to super, those funds will then not be counted by Centrelink until you reach age pension age.

You need to ensure you contribute enough to be below the relevant JobSeeker asset test threshold, without exceeding the superannuation contribution caps.

If you are a single home owner you can have $301,750 in assets.

For a non-home owner the cut off is $543,750.

For 2024-25 financial year, you can use the bring-forward rules to make a non-concessional (after tax) contribution of up to $360,000.

Once you do turn age 67 you can apply for the age pension, and while your super will then be counted, the asset test is much less harsh.

With JobSeeker it’s a sudden-death cut off once you reach the limit, whereas with age pension it’s only a gradual phase down of benefits if you exceed the limit.

For example, if you are a single home owner, if you have assets over $301,750 you lose all your JobSeeker benefits.

With the age pension however, if you have assets only just over this amount you would only lose a few dollars of pension.

You would still receive a part age pension unless your assets exceeded $674,000.

Craig Sankey is a licensed financial adviser and is the Advice Governance and Technical Specialist at Industry Fund Services

Disclaimer: The responses provided are general in nature, and while they are prompted by the questions asked, they have been prepared without taking into consideration all your objectives, financial situation or needs.

Before relying on any of the information, please ensure that you consider the appropriateness of the information for your objectives, financial situation or needs. To the extent that it is permitted by law, no responsibility for errors or omissions is accepted by IFS and its representatives.

The New Daily is owned by Industry Super Holdings

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