Do I need an adviser to plan my retirement?


Is it compulsory to appoint a financial adviser when I retire, asks a Fin24 user.

The simple answer to your question is no; there are a variety of platforms that can accommodate your accumulated retirement savings that do not require an adviser, says Stephen Katzenellenbogen, a CFP® professional and director at NFB Financial Services Group.

Your question most likely has one of two origins; you either feel you have the necessary knowledge to manage your investments, or you think the cost of an adviser will be too high.

In the first scenario, as long as you are always up to date with changing legislation and have a good grasp of markets, funds and investment platforms you should be fine. The decisions you make in the early part of retirement will have a massive impact on your portfolio in ten years’ time and beyond.

Your largest risk when retiring is running out of money. When you retire, your accumulated wealth cannot be recreated and you must be confident in your ability to make the best decisions for you and your family without professional guidance.

In the second scenario where you may feel the cost of an adviser to be prohibitive, there are a few points that need consideration. In some instances, using an intermediary can get you access to a preferred platform and unit trust pricing which have lower fees than those that can be accessed on a retail basis; this may change with the onset of Treating Clients Fairly regulations.

The cost of an adviser may thus be neutralised and you get their advice for free.

Let’s now assume there is no saving by using an adviser. Especially in the retirement space there is a lot of legislation that changes fairly regularly. These changes can impact the way you invest; the way you take your income; the way you and your investment are taxed; and the way your estate is taxed.

A good financial adviser will make sure you are positioned beneficially. The fund selection process when taking a monthly withdrawal from an asset is key - beyond long-term performance, careful consideration needs to be given to volatility and taxability because different products and funds have different tax implications. 

Not only do different products have different tax implications, they also have different estate implications. A knowledgeable adviser will add value in excess of any fees levied.

Good luck and enjoy your well-deserved retirement years.

- Fin24

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers. Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

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