Why do I need a Financial Plan?
We all aspire to do better financially. Unfortunately investing for the future and achieving our financial goals or achieving a better financial position is important but never URGENT. For most people it usually takes a lower priority than their other family and work commitments.
Therefore, without a team behind you to assist in making this a priority over a long period of time, achieving your financial goals can only be a dream for most people. Statistically only 3% of the entire retiree population in Australia achieve $50,000 or more retirement income per year, so the odds are against us!
At Spark Advisory we offer you a workable long term path to achieve your financial goals through budgeting, financial advice, debt strategies, superannuation, insurance, SMSF, investments solutions in property and managed funds, ongoing advice and specialist advice services including SMSF property portfolio modelling.
These form a diverse range of solutions to assist you from managing your money better, to growing and building your investments to achieve your goals throughout your working life and in retirement whilst not lowering your quality of life.
Why ongoing service is important?
Budgeting is a simple activity that helps people to track their income and expenses. Successful budgeting is the key to good financial management. By understanding your day to day finances, you are able to judge whether your spending is essential or optional, and to think about ways to save as much and as regularly as you can by making a plan and setting some goals.
90% of Australians say they have the ability to budget and 57% say that is it important to learn more about how to budget day to day finances, but around half the adult population say they don’t budget regularly.*
Saving is closely related to budgeting. Budgeting is the tool which assists people to understand their capacity to save. The key to successful saving is to start early, no matter how small the savings.
88% of Australians say they have the ability to save and 65% recognise the importance of learning more about saving, however only around 60% of Australians have the plan to save, and many of them don’t save regularly.* Once you establish that you can and want to save, you need to decide how to save, how much to save and how often.
Asset allocation refers to how investors distribute their investments among various investment asset classes. Asset classes are types of investments, the main being cash, fixed interest, property and shares. Numerous studies have shown that asset allocation is a key driver of investment returns, playing a much larger role than individual investment asset selection.
Over the last two decades, no asset class has outperformed on a consistent basis. Yesterday’s winner is often tomorrow’s loser and vice versa. Your aim as an investor is not simply to get the highest possible return, but to get the right balance between risk and return for your individual risk profile. Given the dynamic market and economy nowadays, you would need to review and adjust your asset allocations to reflect all the changes and investment opportunities in the market.
Through successful saving, people can learn many of the skills they will need to invest successfully, such as the ability to assess rates of interest paid, fees and charges, terms, and ease of access to different types of investments. Many people use these skills to become investors, although they may not see themselves that way.
Compared to budgeting and saving, fewer Australians are confident in their ability to invest (69%) but 70% recognise the importance of learning more about investing. When making an investment decision, only one third of investors would consider both risk and return, and only a small proportion (less than 6%) would consider other crucial factors when investing, such as industry background, diversification and tax effectiveness.*
Loans can be an essential part of achieving longer term goals such as buying a home, but their costs, including repayments and fees and charges, should be understood and affordable. Most Australians have loans increasing with age, peaking for people aged 30 to 44 and decline thereafter.
With loans, it’s a good idea to repay more than the minimum required and make additional or more frequent repayments whenever possible. However only 32% pay more than the minimum required on loans.* There is no better way of saving money than paying off debt early.
*Australian Government Financial Literacy Foundation
Retirement & Planning
81% of Australians are highly confident in their ability to plan for their long term financial future but only around 60% say they have the ability to ensure enough money for retirement. Planning is the best way to achieve security in retirement, and the earlier you put your plan into action, the more choices you will have.
To achieve your retirement goals, you need the same skills they acquire in becoming successful savers and investors. 86% do not believe that the age pension will be sufficient for retirement, and 73% say employer funded superannuation will not meet their retirement needs.*
Reviewing Your Situation
Your financial plan is one which chalks out your financial goals and how you plan to achieve them. As your situation in life changes, your financial plan also requires regular reviewing and change. Just as how you undergo regular health checkups to review your health and regularly service for your vehicle or electronic appliances, your financial plan also needs regular examination. Here are a few reasons on when it becomes important to review your financial plan.
All personal and economic changes in your life need to be incorporated in your financial plan. This does not mean that your financial plan should be reviewed only if you face the above changes in your life. Even if things do not change, you must review your financial plan at least once a year to analyse the position of your investments and see if this is helping you achieve your goals. Remember that merely creating a financial plan will not help you attain financial stability. Reviewing the plan regularly, making changes as required and leading a disciplined life will help you meet your goals and achieve financial stability.
Spark Advisory Ongoing Service Packages
|SILVER From $1,200 PA||GOLD From $2,400 PA||PLATINUM From $5,500 PA|
|Quarterly Business Update|
|Annual Mortgage review|
|Access to your Financial Planner||3 hours per annum||10 hours per annum||Unlimited|
|Access to client services|
|Professional investment management|
|Half yearly Investment Report|
|Annual Portfolio Review Report|
|Advisor Review Sessions||Offered Annually||Annually||Half Yearly|
|SMSF Accounting & Audit|
|Strategic changes via reviews requiring amendments to advice||$330 per hour||$330 per hour||No cost|
Let’s start something together!
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