Do I need a financial adviser to plan for retirement?

Saving for retirement can be difficult because it seems far away, while obligations like supporting family members seem immediate. Sometimes, we need perspective to prioritise and secure our financial future. This is especially the case when planning for retirement, which is a long-term goal that requires a holistic view of all your assets and needs.

Are financial advisers worth the money?

If you've ever felt uncertain while reading investment terms, take a little time now to get familiar with them using our retirement dictionary.

Industry studies show that financial advice can add around 3% value to portfolio returns over the long term depending on the period and how returns are calculated. This is because financial advisers are equipped with the knowledge and skills to navigate the investment market and determine which products are best suited to you based on your financial goals.

Two key advantages of having a financial adviser

1. They can tailor a plan so you invest more effectively

Financial advisers and planners are regulated and required to have extensive knowledge of the products they recommend. This is important because investment strategies vary widely depending on many factors, like how old you are, how many dependants you have, whether you want to retire early or whether you want to retire abroad.

An adviser would do a risk profile or financial needs analysis on you and draw up a tailored plan to help you improve your savings and investment behaviours. This includes selecting appropriate financial products, improving the tax efficiency of your savings, assisting with estate planning and optimising your asset mix based on your circumstances and risk tolerance.

2. They can help counter emotional decision-making

Financial advisers stay up to date on information that affects your portfolio. This enables them to crunch the numbers on different scenarios and spell out pros and cons. Advisers can help you keep a cool head when markets are volatile, ensuring you don't make decisions which damage your financial outcomes down the line. This is referred to as behavioural coaching, which can have a massive impact on your finances.

Context and guidance will help you counter the behavioural biases that keep you from achieving your retirement goals. At the same time, being accountable to an adviser can keep you disciplined in practising healthy investment behaviours. In short, consulting a trusted financial adviser could be one of the smartest decisions you make.

How do I find the right adviser for me?

Finding an adviser that you can trust to help make critical financial decisions with lifelong implications is an important task. This person will help you develop a healthy relationship with your money, so choose an adviser in the same way you'd choose a personal trainer or a marriage counsellor.

Look for someone who:

• Is licenced. These are professionals who are registered with the Financial Sector Conduct Authority (FSCA). They are qualified to sell you specific financial products as they've passed regulatory exams and undergone training. Check the FSCA website to ensure an adviser is registered to give advice.
• Communicates clearly and openly by using language that you understand.
• Takes the time to understand you and your personal situation. You should feel comfortable expressing your hopes and fears and asking questions if you're unsure of a recommendation.

These qualities can make all the difference in helping you find and stick to a retirement investment strategy that best suits you.

If you don't have a financial adviser yet, fill out the contact box below and Discovery Invest can get a qualified adviser to contact you.