Do I Need a Financial Advisor To Manage My Super?

Do I Need a Financial Advisor To Manage My Super

Having a financial adviser to manage your super is the most inefficient use of your retirement wealth.

In fact, I’d go as far as saying that a financial adviser charging you for “managing” your super means you either have an adviser who is immoral or deluded.

Do I Need a Financial Adviser to Manage My Super?

You do not need a financial adviser to manage your super. You should have a financial adviser to assist with advice relating to super contribution amounts, contribution types, an appropriate super fund and suitable investment choices; but there is no need for them to manage your super on a monthly basis.

Let me explain the difference.

When You SHOULDN’T Pay a Financial Adviser

In my opinion, you shouldn’t pay a financial planner if:

  • They accept commissions from investment or insurance product providers;
  • Charge percentage based fees calculated on your investment/super balance; or
  • Charge ongoing advice fees (unless you are extremely time-poor as a business owner or professional and require constant contact with a financial planner)

Prior to engaging the services of a financial planner, you need to be asking the adviser if they are remunerated in any of the ways detailed above. If so, you might want to consider an alternative.

The majority of Australian financial advisers engage around 2 to 5 new clients each month. This isn’t enough to financially support the cost of their office rent, staff, licensing, infrastructure and software – let alone pay themselves a wage. Therefore, in order to have a sustainable business model, they need to convince their clients to pay them an ongoing monthly fee, which is usually in the hundreds (and sometimes thousands) of dollars per month.

This ongoing fee is an indefinite payment and can provide them with an excellent source of revenue once they have accumulated, say 50 to 100 clients, as you can imagine.

They will tell you that you need them to manage your super and investments on a regular basis, because of the highly intelligent and complex portfolios they have put in place for you. I mean, how could you possibly manage it yourself!?

Please… give me a break!

So that it’s not so in your face, this ongoing fee will often be deducted from your super or investment balance, so that it doesn’t seem to be hitting your hip pocket.

They’ll often also charge their fees in percentage terms and tout it as ‘having skin in the game’. They will say that they make money if you make money. What a load of BS! A financial adviser has no control over investment markets.

Financial advisers are not investment managers. They are neither trained nor educated to actively manage investment or super portfolios, despite some of them (the deluded ones) thinking they are. This is not the skill-set of a financial adviser. This is the skill-set of a fund manager or stockbroker.

Then there’s the other financial advisers who are fully-aware that investment management is not their skill-set, but will convince you that you need them to manage your super and investments anyway (the immoral ones).

The only time when I think an ongoing fee can be justified is not in relation to investment advice from a financial planner, but rather when you are a very busy professional or small business owner, or someone who has constantly changing financial circumstances and need to have at least monthly phone/email contact with a financial adviser to determine the best course of action.

When You SHOULD Pay a Financial Adviser

So, is it worth paying for a financial adviser?

The role of a financial adviser is to work with you to define your short, medium and long-term goals and then to put in place a plan to help you achieve those objectives.

To do so, your adviser needs to have a thorough understanding of the relevant rules, taxes and strategies to help you achieve your objectives. Any investment recommendations do not need to be complex or high-maintenance, but rather be aligned with your risk comfort levels and intended to produce investment returns in line with expectations to help you meet your objectives.

A good financial adviser will be able to prepare a sustainable financial plan for you that should only need updating every 3 to 5 years (or maybe never for retirees), with potential slight amendments in the meantime. Updated advice more often than this, or being convinced to pay ongoing fees, will likely mean that the cost outweighs the benefit.

In my opinion, it is only worth paying for a financial adviser in Australia if the adviser:

  • Only charges a one-off advice fee for a fixed cost;
  • Does not charge percentage-based fees;
  • Does not accept any commissions from product providers;
  • Does not charge ongoing fees; and
  • Has no affiliation with any large institution.

There are advisers who operate in this manner. They are able to do this because they have enough new clients each month, so that they are not reliant on ongoing fees to sustain their business.

These types of advisers are definitely not maximising their own business revenue, because charging unnecessary ongoing fees can be lucrative. But at least they can sleep at night knowing they are doing the right thing by their clients.

Our financial planning firm, Toro Wealth, specialises solely in helping 50 to 70 year-olds optimise their financial position in the lead up to retirement. If you’re interested in learning more about our service and cost, click here.

Read more: Are Financial Advisers Worth It?

Can I Self Manage My Super?

Yes, you can self manage your super. There is no reason why you shouldn’t be able to look after your own super on an ongoing basis. In fact, a very effective superannuation strategy is a set-and-forget style investment strategy. Often, once you have a strategy in place, the less you do with your super investments, the better.

While it is possible to self manage your super, it would be more beneficial to have a financial adviser put in place a plan for you and then hand the reins back to you once implemented. At your discretion, you should then return to your adviser if you are thinking of making any changes or have had any significant changes to your situation. This way, you only pay for advice when you need it.

Simply knowing what happens to your super when you retire can provide a great head-start towards planning your retirement. I’ve put this video together to show you exactly what happens to your super when you retire.

Importantly, you do not need a self managed superannuation fund (SMSF) to self manage your super. This is a large misunderstanding of how superannuation works.

Who to Ask for Super Advice?

For the best super advice, you should be asking for super advice from someone who has no conflicts of interest. Specifically, you should only ask for super advice from someone who you have paid a one-off fee to for their time and expertise and in return receive independent, non-conflicted advice.

To get this type of quality advice, you will need to pay a reasonable amount for it. If someone is offering you advice for, say, less than $2,000, it might be a sign that you should be running in the complete opposite direction, because it is likely they will be receiving additional remuneration to this in some other form, which probably results in a conflict of interest.

Here are some questions to ask yourself and a potential financial adviser if you are seeking super advice:

  • If my adviser says their fee is less than $2,000, will they be expecting me to pay ongoing monthly fees? (answer: very high chance – or see next question below)
  • If my adviser says their fee is less than $2,000, will they be receiving remuneration from another source, resulting in conflicted advice? (answer: very high chance – or see question above)
  • If I get advice from a financial adviser that works for my super fund/bank, will the advice be independent and non-conflicted? (answer: hmm… I’ll let you figure that out!)
  • If I choose to pay ongoing fees, will my financial adviser be making tactical changes to my investment portfolio on a daily, weekly or monthly basis? (answer: they’re probably unlikely to make any changes on an annual basis, let alone more regularly than that).

Where to Get Super Advice?

Financial advice in relation to superannuation should be sought from a well-experienced, highly-educated, independent financial adviser, with no association with any large financial institution.

The financial adviser should provide you with advice that puts you in a better position and has nothing but your best interest in mind. You should expect to pay a commensurate fee for such advice.

It can be very difficult to find a financial adviser who offers all I have laid out for you, above; because, unfortunately, most advisers would not be able to run a sustainable business if they did.

However, there are some advisers out there who can.

We are one of them. Our advice firm, Toro Wealth, specialises solely in superannuation and retirement planning advice. We charge a one-off fee for a comprehensive retirement plan. We do not charge ongoing fees, never accept commissions and are not aligned with any large financial institution.

Our small team of well-experienced and highly-educated advisers are ready to help you prepare for retirement. We’re very proud of who we are and what we do. Learn more about Toro Wealth by clicking a link below.

Meet our advice team here


Learn about Toro Wealth here

Frequently Asked Questions (FAQ)

Here are some frequently asked questions around whether or not you need a financial adviser for your super, how a financial adviser can help and if it’s worth paying a financial adviser.

Do I Need a Financial Adviser for My Super?

You do not need a financial advisor for your super, but a financial adviser can most certainly provide value in regard to super contribution advice, super fund and investment option choice and other retirement planning strategies.

Without professional financial advice, it is likely that you are not optimising your financial situation and strategy.

Is it Worth Paying for a Financial Adviser in Australia?

Yes, it is worth paying for a financial adviser in Australia, provided you have chosen the right adviser and are receiving value for what you are paying for.

Our financial planning firm, Toro Wealth, specialises solely in helping 50 to 70 year-olds optimise their financial position in the lead up to retirement. If you’re interested in learning more about our service and cost, click here.

Can a Financial Adviser Help With Superannuation?

A financial adviser can be instrumental in helping with your superannuation. You should be able to receive very valuable advice in relation to:

  • how much you should be contributing to super;
  • which super fund you should have;
  • how you should invest your super; and
  • When you should be drawing down on your super.

However, the important thing is to ensure you are not paying for a service that you are not receiving – which typically occurs when you are paying unnecessary ongoing fees.

Discover More Content on SuperGuy:

Hi, I hope you enjoyed reading this article.

If you want my team and I to help with your retirement planning, click here.

Thanks for stopping by - Chris