Uncover a good egg with these 10 questions while avoiding a bad egg

As retirement fast approaches, or perhaps sooner than expected, the fear or running out of money in retirement looms large.

While accumulating assets for retirement is a significant achievement, the transition to generating a lifelong income presents complex challenges. Without the certainty of employment income, it’s critical to assess if your assets can sustain your lifestyle throughout retirement.

Why Seek Professional Advice?

Retirement planning entails navigating numerous risks and uncertainties as you approach and transition into retirement.

From assessing the ability of your accumulated assets to fund a lifelong income, longevity, investment, inflation risk and many more. Seeking expertise of a specialised financial planner can provide invaluable guidance in charting a secure path through retirement.

Helping you to identify blind spots and roadblocks you can’t see yourself and building enough of a safety margin to preserve your retirement income for each stage of retirement. No matter how long you live. Providing peace of mind at times you’re most anxious.

Sure, you might turn to your super fund, but they have limited capabilities and information on your situation? They might know about your account balance, but what about your wider situation, including property, assets and your retirement objections. They may not consider the wider solutions outside of what they have available which may be better suited to you circumstances.

As retirement looms, it’s likely you’ll need professional advice.

Retirement provides the opportunity for a great adventure full of amazing experiences and memories. The last thing you want is to get your planning all wrong and run the risk of running out of money when you’re 81.

Living in poverty in retirement is probably an option you want to avoid.

Your riskiest period is the period five years prior to retirement and five years post retirement. Making costly financial mistakes in this period can be monumental to the success of your retirement.

Sure, there’s the DIY route, but the cost of getting it wrong is a big price to pay…

The DIY route leaves you exposed to making monumental mistakes which may cost you the retirement you dreamt of. Leaving you at risk of running out of money.

Let’s think about it for a moment. You’ve spent the last 30 or 40 years accumulating money where maximsing your investment return was the priority. It’s worked well for you till now…but you also had your income from employment to rely on.

For most people, their income from employment will stop once they retire from the workforce. You are now solely reliant on the financial resources you accumulated for the last 30 or 40 years.

What you did for the last 30 or 40 years now presents a massive risk if you continue doing the same thing through retirement.

There’s a famous saying, “what got you here won’t get you there” is very relevant as you approach your retirement years.

It’s not like you’ve been retired before, so how do you know what to plan for?

The majority of the information you’ll find on the internet is focused on the accumulation of assets. It’s like a cesspool of financial confusion.

But how do you tell the good eggs from the bad eggs?

I’ll get to that in a moment.

Harry did the right thing but ended up with a bad egg…

First I want to tell you about Harry (real name protected for privacy reasons).

Harry did the right thing.  He sourced a financial planner. He wanted help and knew he couldn’t go it alone.

However, everytime he spoke with his financial planner, they spent the majority of the meeting discussing their investments. It was driving him and his wife crazy. Leaving them in dark.

Not to mention the constant changes in advisers and having to tell them their story time and time again.

Yet, when I spoke with Harry recently, he was on the home stretch. Wanting to retire, but still had no clarity around whether he had enough money for a comfortable retirement.

I nearly fell off my chair when I heard this. Thinking to myself, you’ve done the right thing, hired a financial planner, but don’t know how you stand in terms of your retirement. Wow, what a waste of money.

This financial planner was letting Harry and his wife down. After further discussion, it became apparent this financial planner was more interested in their money than them. The planner was inexperienced when it came to retirement planning. This bad egg failed Harry and his wife.

For all I know, they could have had enough to retire years ago, but didn’t know. That’s time lost, they’ll never get back again.

Unfortunately this is not an isolated case. I’ve spoken to many people in the last couple years where I’ve heard similar stories. It’s a travesty. It should not be this way.

If you are working with a real financial planner who specialises in retirement planning, you should be very clear on the path you are on.

While there has been a huge reduction in financial planners due to massive legislative changes, there are still some bad eggs who are solely focused on the investment outcomes rather than helping clients plan an epic adventure in their retirement years.

Don’t get me wrong, the investment piece plays an important role, but if the basic principles are applied you’ll have this covered. Contrary to what you see in the financial media. Let’s not forget they are there to confuse and spread fear.

Let’s have a look at how to avoid a bad egg and find a good one that’s going to help you craft a robust roadmap to an epic retirement adventure. Whatever, that means for you…

How to separate the bad eggs from the good eggs?

1. What makes you qualified to help me?

You want someone who solely provides advice based on your stage in life. i.e. If you are nearing retirement, you want confidence that the only advice they provide is retirement planning. It means they are laser focused on retirement planning rather than spreading their skills far and wide. In other words, you want an expert where retirement planning is their sole focus…

You want to avoid a generalist, someone who advises young, middle aged, pre-retiree and retirees.

Why? Their expertise is spread thin and providing advice in the retirement planning landscape is very different to someone in their middle life phase.

If you are seeking advice on how to plan for retirement, you need someone who specialises solely in retirement. It’s no different than differentiating from a GP compared to a Brain Surgeon.

At Jigsaw Private Wealth, our sole focus is helping people retire with more clarity, confidence and control. We have over two decades of experience and a proven framework to help you guide your retirement decisions. You could say we know what we’re talking about.

2. What is your experience?

You’re looking for responses that show they have been around for a while, more than 10 years especially if you are seeking retirement planning advice.

You want someone who has walked the path you’re about to walk before and many times over.

Just like you’d hire a Sherpa if you were to embark on climbing Mt Everest. You want someone who’s travelled the path many times over. Someone who knows the challenges, risks you’ll face and how to overcome them while avoiding blindspots.

For instance, I’ve been walking this journey for over two decades, helping people craft their epic retirement adventure. While keeping them safe through major market events like September 11th, Global Financial Crisis, Covid 19 and many other events through the last 20 yrs or so. But that does not make me old, I’ve been at it since leaving University.

3. What is your process or framework for helping people like me?

Whatever financial planning professional you are speaking to, you need to understand the process or framework they work with to help you resolve your biggest retirement concerns.

They need to be able to show you how they work…

You are looking for a methodical approach to help you identify your ideal lifestyle for retirement, what you want to achieve, address your financial concerns, how they analyse your situation, provide a retirement feasibility analysis and how they craft your financial recommendations.

If someone starts with how they help you invest, while important, you can’t determine that until you know the journey you want to embark on. If they do, it’s time to thank them for their time and exit stage right.

For instance, we start by setting a strong foundation, understanding what’s important to you, what you value and what you want to achieve in retirement. Call it your retirement vision.

Understanding your current financial position, understanding whether your retirement plan is feasible and helping you craft a feasible plan that you can get excited about.

Only then can we start to look at ways to make your plan more resilient, maximising opportunities, fit for purpose investment risk, ideal retirement portfolio and whether you require a financial product or not. If a financial product is recommended, making sure it’s the right fit for your retirement roadmap.

4. What does this look like and how much time does it involve?

You want to understand how thorough the planner’s process is. The more detailed it is, the more confidence you can have you’ll receive the advice that’s right for you.

For instance we have a four step framework we use with everyone we work so nothing gets missed.

#1 Retirement Clarity Call

This is an opportunity to gain insights into how you can resolve your biggest challenges and concerns around planning your retirement. We’ll even show you a roadmap to help plan your retirement with more clarity, confidence and control.

If there’s a good fit and we believe we can add a multiple return above our fee (the average being over 10X) and it’s right for you. We book you in for your first session.

#2 Retirement Planning Session

It’s a chance to explore what you want out of retirement. To set a strong foundation for making confident financial decisions. You’ll complete a couple of surveys so we can understand where you are currently.

In this session, you’ll craft your retirement vision. We’ll explore your most pressing questions relating to your retirement, so we understand what your priorities are. While understanding your current financial position.

#4 Retirement Feasibility Session

Once we understand what you want and where you are, the next step is understanding if your current plan is feasible. In other words, answering the question, “Can I live that lifestyle?”.

It’s a little like choosing your own adventure. You’ll have clarity on how you are positioned and what options are available to you. This is a critical step (most miss this one) as it will dictate every financial decision you make from here based on the epic retirement adventure you dream of.

#5 Retirement Roadmap Session

After negotiating your feasible retirement plan, it’s time to make your plan resilient and optimised.

Your retirement roadmap session is all about understanding the ins and outs of your retirement roadmap. Everything you need to understand, pros, cons, trade-offs, tactics, strategies are all documented for you. By the end of this session you will have all your retirement questions answered armed with your personalised roadmap to follow.

All conducted over zoom and each meeting runs between 60-90 mins.

#5. Do I have to commit to an ongoing service?

If you are seeking professional advice, you want to understand whether it’s a one off service (short term engagement to craft your retirement plan) or you are committing to an ongoing yearly service.

You may only want professional help to sanity check your numbers and gain professional guidance on what you’re missing. Which means a short-term engagement is ideal.

Or you may want ongoing guidance to keep you from making expensive financial mistakes and keep you on the safe path in retirement. Someone who will help you implement everything for you, provide updates along your journey and be there when you have questions.

You’ll need to consider what your needs are and whether you have the skills and expertise to implement your plan while adjusting your plan along the journey.

The creation of a plan is the start, it’s like your GPS, but for retirement.  But if don’t don’t update, it may send down the wrong path. As life twists and turns, investment markets change and legislation changes, you’re going to need to make iterations to your plan along your retirement journey.

For some, they will be happy to implement themselves. For others, it’s overwhelming and they want extra support so they don’t get it wrong. They want someone they can turn to to keep them on the right track and inform them of changes they should be making. You only get one shot to get it right and one wrong decision can send you down the path of regret.

Ask the financial planner whether they offer a once off service or do you need to commit to an ongoing service from the start.

We work with clients to craft their retirement roadmap first without any commitment to any ongoing service. You can choose whether you need further help after receiving your retirement roadmap or if you have the confidence to implement yourself, you’re welcome to go it alone. It’s your choice.

#6 How do you work with your clients on an ongoing basis?

If you are looking for ongoing support to implement your roadmap so you avoid costly financial mistakes leading into and through retirement, you want to understand what those meetings look like.

Far too often I hear financial planners spending too much of the meeting focused on discussing investments. While a key component of your plan, the main purpose of ongoing meetings is to update you on your progress, how you are positioned, the changes that need to be made and what needs to be planned for next is avoided.

In other words, understanding, “Can I still keep living my life the way I want and not run out of money?”.

It’s important to understand how often you will be meeting throughout the year and what access you have to the financial planner.

When we accept a new client the first year it will involve as many meetings as it takes to implement the plan and set the scene for their Forward Planning Meetings.

These Forward Planning Meetings are designed to show our clients how they are positioned financially at all times. Answering one important question, “Are we still going to be okay?”.

Walking through any changes that need to be made to their plan, whether that be personal or financial to keep them on track. Maybe they need to do more. Maybe they can afford to spend more money. We act as a guide and sounding board for all financial decisions so our clients are in full control of their retirement adventure.

#7 What is your investment philosophy?

This is important as it will highlight the benefits or cons of the approach they take. If the planner thinks they can outperform investment markets, exit stage right. Not even the professional investment managers can outperform investment markets over the long term.

Look for someone who advocates an evidence based approach. Where their investment philosophy is driven by the evidence. In other words, a proven approach to generating investment returns.  Many overcomplicate this…

You want to avoid speculative or new trend investments.

If you are heading towards retirement you need an investment strategy which will manage your investment risk while funding your income in retirement.

Investing for retirement requires a different approach as you transition from accumulation to decumulation.

For instance, we adopt an evidenced based investing approach, which means we rely on what works rather than risky crystal ball gazing. Investing for retirement requires a different approach than required in your working years.

You need an investment strategy that will allow you to pay your monthly income through retirement without having to succumb to investment markets when they go down.

#8 Will you be recommending a financial product?

Asking this question will help you understand whether there are any conflicts between the advice and product recommendations they give.

You are wanting to avoid any financial planners who will recommend a financial product for which the business receives a financial benefit. This is the first sign of conflict and best to avoid no matter how good it seems.

Honestly, when we work with people, we don’t know whether they require a financial product or not.

However, the reality is most will, and if a financial product is recommended, it’s because it suits the plan. I.e. it provides greater flexibility, optionality and protection leading up to retirement and in the decumulation phase of retirement.

If the planner you are talking to is discussing products up front, it’s another sign to disengage immediately.

#9 What are some warning signs/red flags of a bad financial planner?

These are some telltale signs a financial planner or adviser is a bad egg…

• They spend most of the time talking about themselves or their business
• They take more interest in your money than they do you and want you want
• They charge a percentage based fee based on the level of assets you have
• The advisers failing to act in your best interests
• Promising above market or unrealistic promises
• Cannot show you a framework or process on how they formulate their advice
• Use complex language you can’t understand
• Pushy sale tactics
• Lack of credentials or time in the financial planning profession
• Using complex products you can’t understand

This is not a comprehensive list, however, should help you steer clear of the bad eggs.

At Jigsaw Private Wealth, your life, what’s important to you is at the centre of every discussion.  Understanding what you want out of life now and through retirement. Helping to set a solid foundation for your retirement years while providing safeguards to keep you safe when things don’t go according to plan. Helping you to understand the pros and cons of every financial decision you make. After all, it’s your plan…

We charge a flat fixed fee and you have control over how long you want our support.

#10 How much does it cost?

Financial advice is not cheap. Financial Planners operate in a highly legislated environment which adds to the cost of providing advice.

If you are seeking professional advice, you need to be thinking in terms of cost being an investment in your future. Any cost you pay a financial planner should provide a financial gain and non-financial gains.

The two main ways financial planners charge are via an upfront and ongoing fee. Some charge based on a percentage of the assets they are managing. Others charge a flat fixed fee.

I’ve got to say I’m not a big believer in charging based on the level of assets someone has. How can you tie your fee to something you have no control over?

Look for a financial planner who charges a flat fixed fee.

At Jigsaw Private Wealth we charge a flat fixed fee to craft a retirement roadmap and a flat fixed fee for ongoing advice based on complexity.

Don’t let time drift by, take control of your retirement journey now…

The cost of inaction may cost you your retirement dreams. Planning your retirement is not as simple as plucking a few numbers into a calculator. It’s more complex than that. You’ve got income, taxes, inflation, investments and longevity to figure out. It’s not a simple calculation.

Stop drifting into retirement where you run the risk of running out of money.

Take the first simple step towards realising your retirement dreams by booking a Retirement Clarity Call by clicking here.

Glenn Doherty – CFP – Financial Planner | Retirement Planning Specialist |Retirement Planning Made Simple for aspiring happy lappers and avid travellers within 7 years of retirement

We work with people in Adelaide and around Australia virtually via zoom!

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