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The Value of Advice

Good Advice = Great Value = Peace of mind.

As Financial planners, we have the tools and knowledge to help you secure a financial plan that will not only help you save and invest however will also help you protect what you have. The actual value of advice is sometimes intangible, that is hard to value, in this flyer we explain what the value of advice is.

Your Financial Adviser at Financial Lifetime Solutions Pty Ltd, has the ability to provide great value for money, we offer guidance, an unbiased opinion and unattached decision making support. We can provide you with ongoing effective strategies that may help you achieve a greater reward compared to the cost of our advice. The right planner has the potential to provide outstanding value for money, creating a benefit that reaps rewards far in excess of the cost involved *

As advisers it's our role to

  • Speak with you and gain a understanding of your goals and objectives
  • Ensure you are invested as per your risk profile, which is that you are comfortable with your investments in terms of growth and income.
  • Help to diversity your investments ( superannuation and other investments )
  • Make sure you and your family are protected in the case of unforseen events such as Heart Attack, Cancer, being off work for an extended period of time due to sickness or illness, in the event of a family member or business partner passing away, or if found totally and permanently disabled.
  • Develop a working budget to implement savings plans, or to put some money away for your children
  • Help with a multitude of other services such as helping with estate planning

We all have the potential to build a sound financial future, sometimes all it takes is to partner with someone that will help us reach our full potential. Financial planning is not just for the wealthy, it's for anyone that wants to have goals and wants help to reach them.

Much of an adviser's value comes from providing a disciplined approach to customer's financial planning needs. Additionaly there are times when an adviser can assist clients in maximising their after tax income, including assessing government benefits. Estate planning is also an important area that financial planners can add value for their clients **

One way of seeing the benefits of using a financial adviser is to look at the outcome of the advice, compared to the outcome if the existing strategies were continued. This is a simple example and was taken from the paper from the Institute of Actuaries' of Australia, The Value of Advice, The financial Adviser, Value Creation and Remuneration, Prepared by Richard Cornwell, 2006

Mr Jack Jones has the following

  • Salary $40,000
  • $40,000 in super
  • $10,000 savings , he is currently saving 5% of pre tax income
  • Superannuation is invested in a conservative strategy, mostly cash and bonds
  • Default Insurance with a superannuation fund.

How does a planner help in this instance with his cash flow and superannuation?

  • We review the client's budget by doing a cash flow analysis. With this review for example the adviser found that Jack can actually increase savings to 7% of pre tax income.
  • The adviser finds that Jack is actually a growth investor, not conservative, and implement a growth portfolio for him in superannuation, this already improves returns by at least 1.00% per annum.
  • If we look at the actual figures, Jack is not a rich person by any means, however even if he thought he would not benefit from financial advice, this has been very valuable for him as shown in this table, bear in mind this table was researched independently by the institute of actuaries, not by a financial planning firm.

Increase in Value from Strategies implemented by Financial Planner**


Budgeting Advice Value

Risk Profile Advice Value

Fund Selection Advice Value

Cost of Advice

Net Benefit to client after advice fees



















Financial Advice Value - Insurance

Usually, the insurances inside superannuation for example will be offered by a fund at default level, that is all members get the same cover based on age. If something happens to Jack this cover may not be adequate. If he saw a financial planner, the planner can look at the cover, what it covers, what amounts, and then tailor it so that if Jack (or his wife or even his children) die or are made totally and permanently disabled for example, the money is allocated as per the financial plan, which all family members need to be aware of.

Bear in mind your planner will also be there for claims which can ensure you have someone there when you need it most. A planner will also usually look at other types of insurances not available through super funds such as Trauma Insurance. The benefit of having Trauma insurance would be that it covers medical conditions total and permanent disability insurance does not cover. There is a clear value here of having a planner or adviser ensure your insurance is tailored for you and your family, as in the worse case scenarios you know what cover you have, with default insurance in superannuation for example this can change as you get older, so it may not be appropriate for clients, you still pay for it, so why not have it tailored correctly?

* FPA, Good Advice is Money Well Spent

** Institute of Actuaries' of Australia, The Value of Advice, The financial Adviser, Value Creation and Remuneration, Prepared by Richard Cornwell, 2006 of advice.pdf

** A simple explanation of the value of advice with superannuation. this excerpt was taken from source **

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