Do I Need a Financial Advisor to Manage My Super? An Unconventional Perspective

Do I Need a Financial Advisor to Manage My Super? An Unconventional Perspective

Do I Need a Financial Advisor to Manage My Super? An Unconventional Perspective

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Do I need a financial advisor to manage my super? That’s the million-dollar (or maybe even multi-million-dollar) question. Now, don’t let your eyes glaze over just yet. 

It is about your retirement. It’s about that dream villa in Spain, sipping mojitos by the beach and doing the tango till the wee hours of the morning. Or maybe it’s just about not eating cat food on toast when you’re 80. Either way, let’s dive in.

Do I Need A Financial Advisor To Manage My Super? An Unconventional Perspective Do I Need A Financial Advisor To Manage My Super

The Dance of Dollars: Your Super and You

Here’s a fun fact: according to the Association of Superannuation Funds of Australia (ASFA), the average super balance at retirement is $270,710 for men and $157,050 for women. That’s like trying to live the rest of your life on the price of a mid-range yacht. Not exactly the lap of luxury, huh?

If these numbers have you breaking out in a cold sweat, a financial advisor might be your new best friend. But hold on, let’s not rush into an expensive relationship without understanding the fine print.

The financial advising industry is a bit like a box of chocolates. Some are sweet, some are bitter, and some leave a nasty aftertaste. Before you bite into one, you must know what you’re getting into.

Do You Need a Sherpa for the Super Mountain?

Let’s get real for a second. Managing your super is like climbing Everest. It’s a rough, tricky terrain filled with jargon, legislation changes, and financial pitfalls. You can do it alone, but it’s going to be a hell of a lot harder.

But let’s counter that with another metaphor. A financial advisor is like a gym trainer. You can achieve a great body without one, but having someone there to guide, encourage, and stop you from dropping the dumbbell on your foot can be immensely helpful.

So, do you need a financial advisor to manage your super? Well, do you need a gym trainer to get fit?

The Price Tag of Peace of Mind

Let’s talk about cost. As the old saying goes, “You’ve got to spend money to make money.” Hiring a financial advisor isn’t free. According to Canstar, the average ongoing advice fee is about $5,000 per year.

I can hear you now: “That’s a lot of money to pay someone to tell me what to do with my money!” And you’re right. But here’s the thing: it’s not about telling you what to do; it’s about helping you make better decisions.

Can you put a price tag on peace of mind? I guess you can: about $5,000 per year.

The Crystal Ball of the Financial World

What if I told you that financial advisors are a bit like fortune tellers but with better suits and less mystic mumbo jumbo? Their main role is to predict the future—or, more accurately, to make educated guesses about the future of financial markets.

They don’t have a crystal ball (or if they do, they’re in the wrong profession). They have years of experience, a wealth of knowledge, and a network of contacts. They stay on top of legislative changes, market trends, and economic forecasts. And all this helps them guide you in the right direction.

But remember: just like fortune tellers, they can be wrong. So, before you trust them with your hard-earned cash, remember what Warren Buffett once said: “The most important thing to do if you find yourself in a hole is to stop digging”.

Now, consider this. More than three-quarters of active mutual fund managers are falling behind the S&P 500 and the Dow. A recent report showed that 79% of fund managers underperformed the S&P last year, reflecting an 86% jump over the past 10 years. And it’s been 12 consecutive years since the average actively managed large-cap fund underperformed the S&P 500.

Hiring a financial advisor might not guarantee you a front-row seat on the gravy train. But here’s another perspective. Just like a good dietitian won’t guarantee a supermodel body, a financial advisor can’t guarantee billionaire status. What they can provide is a roadmap to better financial health.

The DIY Route

So, you’re considering going solo, huh? That’s cool. But managing your super yourself is like being a one-man band. You’re the guitarist, the drummer, the singer, and the guy playing the triangle. And let’s not forget; you’re also the roadie lugging around all the equipment.

Managing your super requires time, effort, knowledge, and a lot of patience. It’s not for everyone. But it can be a rewarding journey for those with the financial savvy, the interest, and the sheer stubbornness to stick with it.

So, should you manage your super yourself or hire a financial advisor? The answer, my friend, isn’t in the wind. It’s in your personal circumstances, goals, financial literacy, and comfort level with risk.

Frequently Asked Questions:

Is hiring a financial advisor worth it?

The value of a financial advisor depends on your personal circumstances, financial literacy, and comfort level with risk. If you feel overwhelmed by financial decisions or don’t have the time or interest to manage your super, hiring a financial advisor might be beneficial.

How much does a financial advisor cost?

According to Canstar, the average ongoing advice fee is about $5,000 per year. However, fees can vary depending on the complexity of your situation and the services you require.

The Verdict: Do I need a financial advisor to manage my super?

Do you need a financial advisor to manage your super? It’s a bit like asking if you need a mechanic to fix your car. You could do it yourself if you have the skills, the tools, and the time. But if you don’t or rather spend your weekends doing anything else, a mechanic might be a good idea.

So, if you’re comfortable with financial jargon, love reading about economic trends, and get a kick out of spreadsheets, you might be your best financial advisor.

But if the mere mention of terms like “franking credits”, “concessional contributions”, and “co-contribution” makes your eyes cross, then a financial advisor might be worth their weight in gold. Or, more accurately, in super contributions.

And let’s not forget; it’s not just about managing your super. It’s about planning your entire financial future. It’s about ensuring you can live comfortably in your retirement, afford that dream villa in Spain, and avoid the cat food on toast.

This article is for informational purposes only. Always consult a financial advisor before making any decisions about your super.

Konger Avatar
1 year ago

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*The information this blog provides is for general informational purposes only and is not intended as financial or professional advice. The information may not reflect current developments and may be changed or updated without notice. Any opinions expressed on this blog are the author’s own and do not necessarily reflect the views of the author’s employer or any other organization. You should not act or rely on any information contained in this blog without first seeking the advice of a professional. No representation or warranty, express or implied, is made as to the accuracy or completeness of the information contained in this blog. The author and affiliated parties assume no liability for any errors or omissions.