The role of financial advisers in property investment

As financial advisers, their ultimate goal is to help their clients get their finances in order while imparting significant financial management knowledge and skills that they could use moving forward.

According to Ms Brady: “We help them understand what decisions they need to make to move forward to wherever it is that they want to go. We look at different facets, like cash flow and budgeting, which some people don't really enjoy very much, but that’s really in the backbone of investing."

"We look at what strategy is appropriate for them, we look at things like superannuation, insurances, estate planning and more.”

“We look at what the goals of the client are. A lot of people come to us thinking, ‘I need to buy a property’, so we do a lot of digging down in terms of why they want to buy a property and why property instead of other asset types?”

Being independent financial advisers means that the duo operates in the best interest of their clients as opposed to working for the benefit of an institution. This set-up addresses the major reasons why young people don’t usually seek financial advice—mistrust and skepticism.

“When they see someone working for a big institution, how will that play out in terms of the advice that they receive and will there be some sort of conflict with the products that they are recommending? Being non-aligned means we are able to provide advice that is based on what the client needs and not based on an underlying ownership structure,” Ms Brady highlighted.

Before seeing an adviser

Most people come to advisers seeking instructions rather than guidance, realising that they need to plan for the future without actually knowing where they want to end up or what they want to achieve over time.

Goals make up an important part of financial management, which is why Ms Brady and Mr Hyde encourage people to answer a simple question before they seek professional financial advice:

Where do I want to be in 12 months' time? What about five years out?

By starting their journey through a ‘sectional view’ of the future, they avoid getting overwhelmed about the management of their finances and, ultimately, their lives.

Following the easy question, the duo recommends moving forward to the harder ones, such as:

What does the ‘long-term’ look like?

Ms Brady said: “If you're not having those questions, it's really hard to put a plan in place.”

“Life is full of twists and turns and you're going to have to pivot, but the clearer you can be on what is important to you, the easier it is to plan for the future. Really clearly understand what makes you happy and what doesn't. How can you investment align with that?”

Financial advisers can only go as far as helping people realise their goals, but determining a future that they want to achieve is entirely up to the person.

Goals will serve as the starting point to planning and, ultimately, setting a strategy in motion.

“A lot of people say, ‘I just want to be wealthy,’ so we ask them, ‘Why?’ What is your perception of wealthy? There's plenty of unhappy wealthy people in the world, but if you can get your wealth aligned to what's actually important to you and the life that you really want to live, that will drive you to make really smart investment decisions,” according to Ms Brady.

Aside from identifying goals, the duo also advised investors to make use of their time wisely.

With the rise of different options on investment and finances, it’s easy to get overwhelmed and just opt to do nothing. However, when it comes to maximising the benefits of their finances, time will always be of the essence.

Mr Hare highlighted: “The biggest asset that our clients have on their side beyond property, shares, managed funds and term deposits is time. The sooner they get their stuff sorted, the far better off they're going to be in the long run.”

Finding a good adviser

Once the goals are determined, finding a suitable financial adviser will depend largely on the type of service that the investor wants.

However, while different advisers have different ways of addressing their client’s needs, one way to determine the good from the bad is through a simple understanding of their business structure—from licensing to fees.

According to Mr Hare: “Something really positive that's been coming out off the back of the Royal Commission is the fact that consumers are now much more educated in terms of the types of questions that they should be asking. When we sit down with a prospect, licensing arrangements and fee structure often come up.”

Ultimately, to make the most out of the partnership between investor and adviser, investors must scrutinise their options well and make sure that the financial adviser is working in their best interest.

Moreover, the adviser’s services must also complement the style of the other professionals on their investment team.

“We sit at the heart of the entire financial spectrum and work a lot with other professionals to help investors make the right choices,” Ms Brady concluded.

Tune in to Jessica Brady and Glen Hare's episode on The Smart Property Investment Show to know more about the benefits of working with a financial adviser.