Learn

LONG TERM INVESTING

Do I need a financial adviser? feat. Deline Jacovides from Mazi Wealth | Get Rich Slow Club

Profile Piture
By Tash and Ana, Get Rich Slow Club

2023-10-257 min read

Wondering when's the best time to dial in the input of a financial adviser? This Get Rich Slow Club episode answers these questions and more through an adviser's lens. Read our summary below, or skip to the end for the episode.

blog cover photo

Beginning your financial journey is one thing. But confidence in managing your money and protecting it from uncertainties is another challenge. So, when do you knock on a door of a financial adviser?

In this episode, we chat with Deline Jacovides. Her core mission is to instil confidence in those who are progressing in their financial journey. She has invested a decade in mastering retirement financial planning and superannuation funds.

As she started engaging on social media, Deline realised the younger generation were hungry for guidance. Hence, she founded Mazi Wealth . Her goal is to provide these ‘wealth builders’ with a holistic road map for managing, protecting, and spending their money.

In our chat with Deline, we guide you through the differences between financial professionals in Australia. We also pinpoint the exact moments when each one's expertise becomes invaluable. With Deline's insights, we better understand the moments in which one might seek financial advice. Plus, Deline sheds light on the true cost of professional advice.

So, if you're poised to make a financial decision and curious about how to maximise expert advice, this episode can be a starting point.

What’s the difference between a financial adviser/planner, financial coach, or financial counsellor?

When navigating financial planning, it can sometimes pay to have an expert guide. Yet, here's a pickle: should we seek a financial adviser, a coach, or a counsellor?

Before you flip a coin and let chance decide, let's debunk the myths and clarify these roles.

1. Financial advisers/planners

Depending on where you are, some terms in finance sound different but mean the same thing. In Australia, whether you hear “financial adviser” or “financial planner”, we're talking about the same professional.

Think of them as architects of your financial house. They help you craft a blueprint for your financial (and sometimes lifestyle) aspirations.

Financial advisers (or financial planners) sit down with you and understand your dreams. Then, they'll strategise around cash flow, investing, debt management, and retirement planning.

2. Financial coaches

Financial coaches are your financial cheerleaders. They are legally not able to guide you on which specific investment products to pick.

Rather, they focus on education, empowerment, and ensuring you stick to healthy financial habits. Their talking points are often centred on budgeting and savings.

3. Financial counsellors

When the going gets tough, financial counsellors step in. They help individuals in financial distress navigate through legalities and financial systems. Their main goal? Ensuring you're stress-free and financially well.

When exactly do you need a financial adviser, financial coach, or financial counsellor?

To draw a clearer picture of what this means for you, let’s break this down further.

You need a financial adviser…

…if you're someone keen on setting goals (like ensuring you get to enjoy avocados on toast every day post-retirement), and you want a strategic roadmap on achieving this.

You need a financial coach…

…if you find yourself often wondering where your money goes, despite having a stable income. Or if you're struggling to cultivate and maintain healthy money habits. You need someone who ensures you're not just sprinting, but maintaining the pace for a financial marathon.

You need a financial counsellor…

…if a financial crisis is clouding your horizon, and you're seeking ways to wade through the storm. You need a specialist who could provide guidance, support, and a plan to get you back on your feet.

What are the specific triggers that might prompt someone to seek a financial advisor?

Have you ever wondered what motivates someone to visit a financial adviser? Sure, we'd all love to walk into an office and know exactly how to navigate our finances.

But the catalysts, the real reasons for seeking a financial adviser? They're more varied and profound than you might imagine.

The Three D’s

Deline identifies three major life events that often act as triggers: death, divorce, and disability. These are the "Three D's". They're certainly not events we anticipate, but they have a profound impact on our financial landscape.

Inheritances, financial settlements, or disability payouts can all result from these. When they do occur, one looming question often arises: What do I do with this money?

Other reasons people receive a lump sum and need a financial adviser

Lump sum payouts, whether from redundancies or other sources, also play a significant role.

Retiring or exiting a business? Those are common reasons too. Imagine having spent years in a profession or a startup, and now you have a sizable sum at your disposal. Would you know the best steps to make the most of it?

Younger generation are not waiting to seek financial advice until it’s too late

Nowadays, the younger generation isn't waiting for retirement or unforeseen events. Deline observes that they are seeking guidance when laying down their foundational steps.

Starting a family, for instance, is not just about having a cute baby room or picking names. It's realising that life is no longer about scraping enough for your next month's rent and food. You're committing to your family’s future — education, health, well-being.

Hence, there's a newfound drive among young families to structure their finances right. After all, who wants to build a massive portfolio only to find out it's been structured all wrong? The stakes are high, especially when dependents come into the picture.

Making sure things like, for example, insurance policies are in place is no longer a later-in-life consideration.

How do you find a financial adviser?

Most of us reach a point in our financial journey when we consider seeking professional advice. It's the big leagues, so to speak. But how do you find a financial adviser? Where do you start?

1. Ask family or friends

Just like we turn to our friends for advice on the best restaurants, asking them about their financial advisers isn't a bad place to start. After all, there's comfort in numbers. However, it’s key to remember that that same adviser might not cater to your financial needs or situation.

2. Request an introductory call

Interestingly, the traditional Google search is still in play. Many advisers are open to an initial chat. It gives you a chance to see how a client-adviser relationship between the two of you would look.

Ever met someone at a party and instantly felt a connection? That’s the vibe you should feel with your financial adviser.

This isn’t just about money; it's about entrusting someone with your dreams. And sometimes, yes, those few financial skeletons you don't want anyone to find out.

3. Follow financial advisers on social media

A lot of Deline’s clients are connecting with her through platforms like Instagram . By following an advisor on social media, you get to see their personality, approach, and expertise. It also provides you an organic way to gauge if their 'vibe' matches yours.

However, a word of warning: if you do find an adviser via social media, always ensure they’re licensed and reputable. We’ll detail more on this under heading #5.

4. Check out Adviser Ratings website

For those who love a structured approach, Deline recommends Adviser Ratings . It’s a website that highlights adviser profiles, client testimonials, and ratings.

5. Check licensing and specialisation in ASIC Money Smart website

Before you shake hands (or exchange emails), there’s homework to be done.

Every adviser worth their salt should be licensed. A quick check on the ASIC Money Smart website can validate their credentials. This is an important step so you are rest assured that they're equipped to give advice.

Moreover, just like doctors specialise, so do financial advisers. Some excel in guiding retirees. Others are aces at helping young couples become financially ready for a family life.

What questions to ask to find the right adviser for you

Have you ever entered a store, browsed the options, and felt restricted? Think of advisers as stores for financial advice. They each come with a range of options, some vast, some limited.

Deline’s take? When hunting for an adviser, don't be shy about peeling back the layers. She suggests including the three questions below in your next chat with a financial adviser.

1. "Who's your typical client?”

This question is a prelude to whether their services align with your needs. If they cater to retired couples and you're a 30-year-old entrepreneur, there might be a mismatch.

2. “What’s your APL?” (Approved Product List)

In the financial world, there's something called an Approved Product List (APL). In essence, it’s the menu of financial products the adviser can recommend.

It's crucial to know this list’s breadth. Some advisers may only offer a few options. It’s akin to walking into a car dealership and only seeing one car brand. Others might have a broad spectrum, providing a veritable range of choices.

3. “What’s the money philosophy behind your investment or insurance advice?”

Every adviser carries a unique financial philosophy. Think of it as a set of beliefs guiding their advice. This money philosophy shapes their approach to everything, from investments to insurances.

You want a guide who sees the financial landscape through a similar lens as you do. It's not just about "What can you offer me?" but "How do you think this offer would help me reach my ideal life?”

What is the fee structure for consulting with a financial adviser?

For a start, there's no standard structure when it comes to advisor fees.
But here's the gist, according to Deline:

1. A spectrum of fee structure

A financial adviser could charge a flat fee, a fixed fee, or even a percentage-based fee. But one thing's for sure: the myth of receiving a commission from every investment or insurance product is just that. It is, in almost all cases, a relic of the past.

When you seek investment advice, it's generally a fee-for-service .

2. The fee depends on the scope or type of service provided

Speaking of fee-for-service, some advisers charge for producing a statement of advice. Others, meanwhile, might have a separate fee for implementing that advice.

Some might loop you into a monthly ongoing fee. It’s like Netflix, but for your finances. The fee could be covering annual reviews and any changes due to evolving goals or legislation.


3. Commission-based

Advisers understand it's unappealing for clients to pay an advice fee on top of their insurance premiums. So, some receive commissions from insurance products that are appropriate to their client’s unique circumstances.

How much does it cost to get a financial adviser?

The cost of receiving financial advice is in the ballpark of $4,000 AUD. But Deline suggests this is probably more in line with scaled or scoped advice. This kind of advice is targeted to specific areas of your financial life.

If you need something more comprehensive, it’s probably going to be north of that estimate.

Why is financial advice so expensive?

Now, let’s answer the elephant in the room. It’s not just advice-seekers who complain about the prohibitive cost. As much as advisers want to help, the truth is being licensed to give advice isn't pocket change for them either.

To give you the advice you seek, advisers have to shell out a hefty amount every year. It costs an average of around $40,000 AUD just to stay licensed.

This doesn’t include other running costs, such as employee salaries, rent, and software (Deline’s costs tens of thousands a year!). So, when they ask for their fees, they're essentially trying to cover their costs and make a fair earning.

What qualifications should you look for in a financial adviser?

Financial advisers in Australia are expected to hold a relevant degree. On top of that, they are required to pass a national exam and complete a pivotal ethics subject.

The national exam, for instance, is not your run-of-the-mill pick-an-option. It challenges them to see things from the regulators' perspective, rather than personal beliefs or insights.

Beyond these educational benchmarks, there’s a rite of passage – the ‘professional year’. Think of it as the financial advisory world's version of an apprenticeship.

Novice advisers undergo rigorous and structured mentoring from seasoned professionals. They gain practical experience and are required to achieve specific milestones. Thankfully, the rookies do get paid, even if it's not the full adviser salary.

Asking the right questions could improve your personal finance

Consider this: you're about to build a house. But instead of hiring a builder right away, you first research just about everything. You explore the basics of architecture, the types of materials, and the design styles.

Why? So when you finally do approach a builder, you come informed. You are ready to collaborate, and not just be led.

Similarly, financial literacy is like that house.

It's invaluable when you approach a financial adviser with foundational knowledge. Not only do you streamline the discussion, but you also welcome more profound and tailored advice.

If you're not yet in a position to seek a financial adviser's counsel, where do you turn to boost your financial IQ? Where's the starting line on this track?

You're living in the age of information. Podcasts, like this very one you’re reading about, and books are commendable start. Countless online resources could also put you in the driver’s seat and make professional advice worth the cost.

Wrapping up…

As we tie a bow on this episode, we're reminded of Morgan Housel's fitting words from “The Psychology of Money”. Morgan said: "Doing well with money has little to do with how smart you are and a lot to do with how you behave.”

It’s typically a behaviour of seeking to understand. An understanding that you cultivate by learning and asking for professional guidance. That way, you’re not huffing and puffing when your financial plans come in contact with realities of life.

And who says you have to go at it alone? At Get Rich Slow Club, we're all about community learning. Share insights, ask questions, and connect with fellow long-term investors on Instagram and our Facebook group . Or you can touch base with the Pearler Community on the Pearler Exchange .


Happy investing!

Tash & Ana

WRITTEN BY
Author Profile Piture
Tash and Ana, Get Rich Slow Club

Tash and Ana are the co-hosts of the Get Rich Slow Club podcast.

Related articles

active and passive income get rich slow club
Long Term Investing

How to make more money through active and passive income | Get Rich Slow Club

In this Get Rich Slow Club episode, Tash and Ana discussing getting rich slow by earning more. Read our podcast wrap below, or sprint to the end for t...

Profile Piture

By Tash and Ana, Get Rich Slow Club

4 min read

investing admin
Long Term Investing

How to stay on top of your investing admin | Get Rich Slow Club

Are you looking for ways to streamline your investing process? Our investing admin checklist can help you stay on top of your investments. To listen i...

Profile Piture

By Tash and Ana, Get Rich Slow Club

6 min read

first trade free
first trade free

Your first trade is free after
signing up to Pearler!

Home