Your Financial Needs

As financial planners, knowing our clients formally commences during the completion of the Financial Planning Client Questionnaire.

Goal setting is crucial to the initial success of a client committing to have a financial plan documented. Goal setting enhances the life planning principle central to financial planning and reiterates the fact that most clients value the quality of their lifestyle more highly than making money. Knowing what you are trying to achieve with your money will allow you to set financial objectives.

People often have a large list of wants and needs, but these can be quite vague and hard to quantify. A financial planner's role is crucial to identifying and prioritising goals. Precise questioning and dialogue can help you assess what you really want, while it's also valuable to get you to rank your lifestyle and financial goals in order from most important to least important. Financial frustration or anxiety is often a product of misdirection; if you do not know why you are committing to a course of action and what you want to achieve.

Your Financial Life Timeline

(Please note that these commentaries on life stages are intended to be suggested guidelines only. It is recognised that you are an individual and these comments may not apply to all unique situations).

Wealth Starter: 20-30 years

Characteristics:

No dependents
Little or low net worth
Few financial commitments - may have a student loan debt
Just starting to earn good money
Desire to spend income on lifestyle needs
A sense of financial independence

Required Advice:

Renting or saving for first home - savings account in bank at minimal rate
Young adult investor has a long time horizon. Is likely to embrace risk and adopt an aggressive investment strategy to accumulate wealth
No thought for retirement as is a long way off
Commencing risk management programme

Wealth Accumulator: 30 - 40 years

Characteristics:

Marriage, house purchase and mortgage
Financial dependents and demands of a young family
Resort to one income family
Professional career development important as is recognition, profile and promotion at work
Building/growing equity in home
Consider top up for lifestyle needs - house renovations

Required Advice:

Risk management - full family protection
Short term investing - children education
Retirement planning becomes a priority- need for growth and capital preservation
Ability to improve financial status and savings
Tax effective investments become an issue

Wealth Builder: 40 - 55 years

Characteristics:

Mature family life
Peak earning years, often both partners are working
Greater stability as financial pressure is easing
Reducing mortgage debt
Children becoming less dependent
Discretionary spending - luxury goods, entertainment and holidays

Required Advice:

Building up retirement savings with surplus funds
Asset management and protection
Cautiously aggressive but still require robust capital growth

Wealth Establisher: 55 - 65 years

Characteristics:

Empty nest with children having left home
High level of equity - most mortgages are paid in full
Discretionary money available is at its highest
Consolidating wealth

Required Advice:

Preparing for retirement stage - life skills to adapt to life after working
Maintaining investment strategy to ensure retirement goals are on track
Converting some risk management premiums to top up savings plan

Wealth Conserver: 65 years plus

Characteristics:

Period of life transition as full time retirement begins
Working part time or no longer working
A continuing active phase of life - maintain a quality, comfortable lifestyle

Required Advice:

Adequate management of investments - question of outliving investments is now real
Managing accumulated wealth to generate regular income
Protecting asset base
Risk management to include maintaining health insurance
Inheritance issues- estate planning