How to make financial advice a good investment
At Tribeca we often get asked the question: “So what is a financial advisor and what do they actually do?” And that’s quickly followed up by, “I’m not sure whether I need a financial planner or advisor to help me.”
Have you posed these questions yourself?
Well how do financial advisors typically work? The answer is most financial and investment advisors will have slightly different takes on their role and how they feel they can add the most value. Here’s ours.
As a financial advisor, we’re here to help you build the life you want by creating a financial roadmap that will make it happen. We do this collaboratively, setting goals together aligned with what’s most important to you – your values; your lifestyle; your priorities. And we’ll give you all the support and advice you need to help you achieve that good life.
For some people they prefer to go about this alone, either because they’re confident in their ability to manage their money or don’t see the value in paying for financial advice. And that’s fine.
But for many a trusted financial advisor can provide certainty and peace of mind around all aspects of their finances. And a good financial advisor will deliver back value in excess of the fees paid (more on that later).
Maybe you’ve come into some money and are not sure what to do next. Maybe you’re going through a difficult time and need some help shoring up your finances. Or maybe you’re simply looking long-term to starting a family and eventually retiring, and want to have a clear plan in place.
A financial advisor can provide a way forward and be there as a support to help you through the good times – and when times are challenging.
Tribeca’s Ask the Experts eBook which looks at topics from financial wellbeing to superannuation and lending.
How can a financial advisor help you?
Proven and professional expertise
Following the Financial Services Royal Commission in 2017 there’s been tremendous change in the financial services industry. It’s resulted in financial advisors having to comply with rigorous education and quality standards, which in turn provides greater expertise and accountability – as it should be.
At Tribeca for example, all our financial advisors are CERTIFIED FINANCIAL ADVISORS® meaning they are fully qualified to support you in achieving your goals and objectives across all areas of your finances. You should settle for nothing less when looking for a financial advisor.
The Adviser Ratings website is a great place to look for the qualifications and expertise of financial advisors: adviserratings.com.au
Creating a plan for your financial future
Financial freedom and security is more than just having enough money to pay down your mortgage each month. It’s about living the life you want to live.
A financial advisor can help you set your goals – both financial and lifestyle – and then create a manageable plan for you to achieve it. That means factoring in everything that impacts your life (home, debt, family, work, insurances, super, tax planning, experiences, etc), so that you can balance all these aspects while never losing sight of your short and long-term goals.
Importantly, a financial advisor can also adjust that plan if your circumstances and financial situation changes. Having that knowledge and support can be priceless.
Holistic financial advice
A financial advisor should be able to help you across all areas of your financial world, from cashflow and budgeting through to asset allocation, investment advice and retirement planning. And every decision should be based on how it aligns with your lifestyle goals.
That’s why at Tribeca we take a holistic approach to financial advice. As our focus is on people rather than products, we start by looking at important life aspects based around:
- Your financial wellbeing where we explore how healthy your relationship with money is and ways we can improve it to a level that enhances your sense of security and freedom to make choices (more on this later).
- Your short, mid and long-term goals (what we call 10/3/Now) where we look at creating an achievable framework for living your Good Life based around the 5 Ls: Life, Love, Learn, Laugh and Legacy. More on this later too.
By taking this holistic view, we can then drill down to the specific areas of financial advice that relate to your needs and circumstances and apply these more effectively.
These areas span:
Growing and protecting your investments
If you already have investments or are looking to start, recent times have shown how challenging it can be managing an investment portfolio. An experienced financial and investment advisor can provide enormous value during these difficult times; supporting you to ensure you don’t lose sight and focus of your long-term goals. And a good financial advisor won’t just rely on their own understanding. They will access a network of people and resources to help monitor market fluctuations on a daily basis and make informed decisions about when to invest more, when to hold, or when to sell.
It’s really about providing investment advice that can help you make better decisions. In a global 2020 industry report, it was found that if someone with an investment balance of $250,000 decided to sell to cash in March 2020, they would have locked in losses of more than $50,000 by the end of May. Whereas a client who was advised to stay invested during the volatility would have recovered almost $20,000 during that same time.
Diversifying your investment portfolio is another important role a financial advisor can help you with. Spreading your investments over asset classes such as property, bonds, shares and commodities ensures you don’t have all your eggs in one basket. Although diversification doesn’t mean you’re guaranteed complete protection from financial losses, it’s a strategy that financial advisors can help you with to minimise your risks.
Keeping you on track and accountable
The real worth of a certified financial planner and advisor comes from helping you to set up your financial and lifestyle goals and then keeping you on track.
A plan will only work if you can stick to it. An effective financial advisor can give you a hand when you need it, as well as give you some tough love if you need to change your behaviour. This is particularly important if you’re in a relationship, where one partner may have a different opinion or behaviour to the other. An independent voice can be invaluable in offering solutions that work for both.
Want some tips on how you can start setting your financial and lifestyle goals?
Choosing the right financial advisor for you – the questions you should ask
So you’ve decided you need the help of a financial advisor. But with so many options open to you, how do you know which one is the right fit for you?
Looking at their website is a great place to start, where you should get an understanding of their experience and credentials, as well as a feel for how they work and what they believe.
The next step is to dig deeper. In your initial discussion with prospective financial advisors, it’s important to take the opportunity to ask as many questions as possible in order to be confident moving forward.
To help, here’s a list of questions you can ask:
Trusting someone with your finances is an extremely important decision. So it pays to be thorough. Armed with these responses, you should be able to make a clear call on who represents your best interests before appointing your financial advisor.
Here’s how we go about financial advice at Tribeca.
OK, so it’s time we put our money where our mouth is and talk about how we believe financial advice should be delivered – from that first meeting and throughout your journey with us.
Living your Good Life
Gone are the days (we hope) where financial advice is hastily given out through the lens of a spreadsheet of demographic filters, where product takes precedence and the client is treated like a number. The best financial planners and advisors will see you for who you truly are as a person, and want to get to know the real you. That’s our approach at Tribeca. To deeply understand what motivates you so we can accurately plan for what your future needs will be, providing you with highly personalised financial advice that works in tandem with your lifestyle.
Sitting at the heart of our approach is ‘My Good Life’, which is about building the life you want by prioritising what’s most important to you at each stage of your life. And then putting a financial roadmap together to help you get there.
In this way, your financial plan is geared towards what makes you happy and what you care about, so that you can reach your goals whilst still allowing you to live life the way you choose.
Slow and steady
Quite often a life event will trigger that first appointment with a financial advisor; a wedding, death, birth of a child, illness, job promotion, job loss. The last thing you want is a hard sell. Before you even commit to a meeting, you want to get a good sense of what is important to the financial advisor and how their philosophy aligns with your own values and approach.
We think that’s so important. It’s why your first contact with us is typically via a 15-minute phone call where we can learn a bit about you and your expectations; and you can learn about us and our financial advisors. We can also help you prepare for our first meeting if you decide to take that next step.
No pressure. No awkwardness. Just a great way to start a two-way relationship.
All about you
It seems obvious, but every person is different. Different values, risk tolerance, lifestyle, occupations, and goals. A good financial advisor will take the time to gain a clear understanding of how each individual makeup will shape the financial plan of that person, couple or family – and how that sits with their overall life goals. You can’t have one without the other.
It’s why our first catch up with you is what we call a Discovery appointment. It’s where we set the foundation for what you want to achieve based on what’s important to you now and in the future – looking at today, in three years time and in ten years.
Yes, this takes a bit of work on your behalf. But we’ve got plenty of ways to help you think about your short to long-term goals, such as the five L’s – Life, Love, Learn, Laugh and Legacy.
Here, we look at:
What does your life look like, now and in ten years time?
What are your important relationships? How will you nurture them and add value to them?
What are your passions that you’d like to get better at, or things you’d like to try in life?
What are the things that make you happy? It could be travelling with friends, painting, baking – anything that makes you smile – or even better, laugh.
What do you want to contribute or give back to society or those around you?
As you can see, it’s not about numbers on a page. It’s about focusing on your overall financial wellbeing so you can achieve those ‘L’ goals – or your Good Life. You should expect this level of commitment and understanding from your financial advisor. It’s the only way to develop a roadmap designed specifically for you.
Honesty and trust
For a relationship to be long-lasting, it must be based on honesty, trust and respect. It’s what you should expect and demand from your financial planner and advisor.
This starts with that first call and meeting, and it also needs to be reflected in discussions about fees and agreed standards. Again, this should be clear and upfront so there’s no chance of misunderstanding.
All of this and more should be detailed in your Statement of Advice (SOA), which must be signed by you before your financial advisor can start implementing your plan.
The government’s moneysmart site has a great summary of what is typically contained in an SOA.
It should:
Remember, this document is your starting point. It’s in your best interests to make sure you’re happy and clear on all aspects of your plan and how your financial advisor will work with you. Ask questions. Challenge your financial advisor on points you don’t understand. Make suggestions yourself. That’s what we encourage at Tribeca, because we think your financial wellbeing is too important not to be 100% on the same page.
A clear way ahead
Now that we have a clear picture of where you are now and what the future looks like, the next big question is how we’re going to get you there.
The answer is with a plan and approach that is simple to understand and implement. We know how hard it is to stick to everyday activities like managing cashflow and budgets – essential to any financial/life roadmap. The more equipped and empowered you are to put these things in place, the greater chance you will have to achieve your goals.
We’re like your personal trainer for your financial wellbeing. You’re the one in control of your wealth creation. We’re there to support you, motivate you, and give you the tools to reach your goals.
There’s many ways we go about supporting you along this journey.
Here are a few:
The Value Factor
The Value Factor was created by our senior financial advisors as a clear indication of the value you can expect to receive from our advice. It provides you with the quantitative aspects of advice (financial) and just as importantly, the qualitative aspects of advice (emotional). Both aspects are drawn from proven research and our own experience and expertise.
At Tribeca, our benchmark is to return four to seven times the value of your ongoing advice fee. This equates to anywhere from $24,000 to $42,000+ of advice value per annum.
We arrive at this forecast by factoring elements like:
- minimising tax and debt
- maximising cashflow and income
- smart investing and changing behaviour
- expert advice and clear planning
- reducing stress and making informed choices
- achieving goals and ongoing support
The Value Factor means you can move forward with a sense of confidence and purpose.
Financial Wellbeing Matrix
Many people worry about money more than their own health. It’s why finances and wellbeing are intrinsically linked. Our financial advisors embrace financial wellbeing for this very reason.
A healthy level of financial wellbeing results in two very strong emotional responses:
By feeling financially secure, it allows you to enjoy the genuine freedom of making choices you want to make – not have to make. To help you identify and enhance your level of financial wellbeing we’ll take you through our Financial Wellbeing Matrix (and revisit it regularly).
By asking you a series of questions our financial advisors will be able to plot your sense of security and how it relates to your feelings towards control over your finances (now), and capacity to absorb a financial shock (in the future). And we’ll also be able to rate your feeling of freedom that looks at your financial freedom to make choices (today), and whether you feel you’re on track to meet your goals (for tomorrow).
Your answers give us a great starting point for identifying what we need to focus on with our financial advice. It also allows our financial advisors to dig a bit deeper into the reasons behind your answers. And work out ways to move a five out of ten rating to a six today, and then a six out of ten to a seven in twelve months time, and maybe a seven out of ten to an eight or nine in the next few years.
For us, it’s not about creating the roadmap and then leaving you to navigate by yourself. We’re with you every step of the way to help you stay on course – or take a slightly different direction if life throws up the occasional fork in the road.
Tribeca Tracker
Keeping on top of your finances is not easy. It’s why we created our Tribeca Tracker so you can have a user friendly digital tool that literally brings every part of your financial world together in the one place.
Available as an app or desktop version, Tribeca Tracker is incredibly easy and intuitive to use, with the software doing all the hard work. By simply providing the access, all your credit cards, bank accounts, property, car, home loan, investments and more are added at the touch of a button so they can be easily tracked and managed.
For cashflow and budgeting, every entry is auto-categorised so you can quickly track transactions and get the full picture of your income and expenses in real-time – and work towards achieving those financial goals.
From a security point of view, Tribeca Tracker has a range of failsafe protocols in place. It uses the same 256-bit encryption that banks use to protect your private details. And like banks, it has a layered security infrastructure with checkpoints throughout to minimise risks.
It’s easily one of our most effective financial advice tools for staying in control of your finances and cashflow.
Our financial advisors are here for you
Talking about personal finance is not an easy thing for most people. It’s why turning to financial professionals such as a financial advisor is such an important decision – so you want to be confident and comfortable in your choice.
We hope this article provides you with some helpful tips to guide you in finding the right financial advisor to help put you on a path to financial success and achieving your Good Life.
If you would like to talk to Tribeca Financial about your financial future, you can arrange a free 15-minute phone consultation with one of our financial advisors here.
