Financial advice ebook

Start planning your future now 1

Introduction by Mark Bouris p3 Why do tomorrow what you can do today? p4 Step 1 – Think about your goals p5 Step 2 – Choose the right adviser p5 Step 3 – Prepare to meet your adviser p6 Step 4 – What to expect from the meeting p6 Step 5 – Understand your Statement of Advice (SoA) p7 Step 6 - Regular review of your financial situation p7 10 Tips and Life Lessons from Our Financial Advisors p8

Taking the time to map out your finances is often the last thing on your to-do list. Whether you dream of travelling or buying a new home, having a personal financial adviser can get you on track to a secure financial future.

Taking the time to map out your finances is often the last thing on your to-do list. Whether you dream of travelling or buying a new home, having a personal financial adviser can get you on track to a secure financial future.

Do you get anxious when thinking about your finances? You’re not alone. That’s why our financial planners are here to take the stress away, help you map out your goals and find ways to achieve them.

It’s never too early to start. A common misconception is that you must have tonnes of money saved, or plenty of assets, before you see a financial adviser. In fact, you’ll benefit even more if you’re just beginning to think about your finances and your future.

Having a financial plan is not just the domain of the uber-wealthy anymore. We think everyone should know their financial situation and plan for their future.

Don’t bury your head in the sand when it comes to thinking about your financial goals, it doesn’t have to be a complicated or scary process. Take the first step to achieving your hopes and dreams and get in touch with one of our local, trusted advisors for a free to see if you could benefit from expert, tailored advice. We’re on your side – we don’t work for the banks; we work for you.

This guide will provide you with tips on how to make the most of your first meeting with a financial adviser.

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Why put of till tomorrow what you can do today?

Have you been avoiding or procrastinating in organising your finances? It can feel overwhelming and daunting thinking about setting up a financial plan to help secure your future. But by taking the first step, and simply talking these through with a trusted advisor, you will be able to map out a clear path towards achieving your hopes and dreams.

Book a free, no strings attached, one-off consultation with one of Yellow Brick Road’s trusted financial advisors to get started, and be one step closer to dealing with your finances head on. There is no time like the present and the longer you leave it, the more difficult it will be to get started.

I want to build a financially secure future.

Many Australians don’t have a plan to achieve financial security. The up side is that it doesn’t matter how much you have in the bank today, or what you earn. It’s what you do with what you have that counts. In fact, dreaming matters too. A financially secure future is one where your reality and your dreams meet. So, let’s make that happen...

Do you have a clear picture of your financial future?

Why don’t you take a moment and ask yourself: • How could I go about building wealth for the long term?

• Should I stay with a salary-based role or start my own business?

• What do I need to do to save for my childrens’ (or grandchildrens’) education?

• How much money do I really need to retire with the lifestyle I’d like?

• Could I afford to take a year off work?

Your answers to these questions may make you realise that you’re not working effectively today towards the best possible financial future. But don’t be dismayed there are simple steps that can be taken to develop a plan for a financially secure future. And we’re here to help every step of the way.

Now is the time to start planning.

Although it is estimated that the vast majority - some 80% - of Australians don’t have a long-term plan for financial security, we believe that it is never too late (or too early) to take responsibility for your financial future.

All you need to do is to stop procrastinating and start working on a plan.

When developing a plan to achieve financial security, most people benefit from having a financial adviser. An accredited financial adviser will help you to develop a set of options and then understand which options are right for you. With a Yellow Brick Road Wealth Manager on your team, building a plan for financial security becomes easy.

Step one Think about your goals Once you’ve made up your mind to get started on your path to achieving your hopes and dreams, it’s time to take a few basic steps to make the meeting with your financial adviser as productive as possible.

The first step is to think about your financial goals. A good way to do this is by timeframe: • Short-term, e.g. saving for a holiday or paying off a credit card • Medium-term, e.g. buying a home or building an investment portfolio • Long-term, e.g. achieving a certain level of income in retirement.

No matter how complex or basic your goals, it’s worth seeking advice on a tailored financial plan for you.

Step two Choose the right adviser The advisor you choose will depend on your life stage and circumstances. If you don’t already have an adviser, you can find one by searching for your nearest Yellow Brick Road branch online and call up or pop in, to make an appointment.

At Yellow Brick Road, we’re on your side, we put your needs first and act on your behalf, not on behalf of the typically bureaucratic banks. It’s important to feel comfortable with and trust your adviser, which is why choosing someone in your community, for simple and transparent advice, is the way to go.

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Step three Prepare to meet your adviser To make the most of your meeting with the adviser - it’s important to be prepared.

As well as thinking about your financial goals, you can prepare by collecting some relevant documents and information for your meeting, including: • your assets and liabilities (what you own and what you owe) • your income and expenses (our budget calculator can help you understand where your money is going on a weekly, fortnightly, monthly, quarterly and annual basis) • details about the insurance you have, and whether you have a current will.

Step four Choose the right adviser At the first meeting, our advisors will take the time to understand your needs, goals and preferences before they make any recommendations.

You can expect to cover off the following basics in the first meeting: Risk and return If you are looking to receive superannuation or investment advice, you should discuss your attitude to investment risk and your capacity to bear risk with your adviser. You can define your appetite for investment risk by completing a ‘risk profiling’ questionnaire, which will assist your adviser in recommending the most suitable superannuation or investments for you.

Cost of the advice Ask for a breakdown of all the costs and your options for paying. For example, you may be billed directly or the cost may be deducted from your investments.

Costs may include advice fees, product fees and commissions. Note: the first meeting is free.

Agreeing on next steps Before you commit to paying for a financial plan, make sure you agree on the goals and areas of advice that will and will not be covered.

Step five Understand your Statement of Advice (SoA) After you have met with your adviser, you will receive a formal SoA, which will: • document their recommended strategy and why it’s appropriate for you • outline any recommended products, and • list all the costs associated with the advice.

Use the following checklist to make sure you understand the advice and how it will benefit you. '' Check the Statement of Advice (SoA) is appropriate '' Check the strategy makes sense '' Check the products fit your strategy '' Ensure you understand all costs

Step six Regular review of your financial situation Once you’re all set up and have your financial plan in order, don’t forget to review your advice and situation at least once a year to ensure you are on track to meeting the goals you set in Step One. An easy way to do this is to set a reminder in your diary for every 12 months.

A review is also a good time to assess the performance of your investments and whether they are meeting your expectations.

And remember, at Yellow Brick Road we are with you every step of the way, so don’t hesitate to get in touch with any questions or concerns.

We’re here to help you.

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10 Tips and Life Lessons from Our Financial Advisors Wise advice is rarely brand new. Much more likely it has been handed down in the richness of life’s experiences.

We asked our advisers to tell us how they came upon their favourite words of advice. “Often the best financial advice we receive is drawn from small moments which are easily brushed off as insignificant. This collection of real life experiences is a tribute to the lasting impact these moments can have if we choose to listen.�

Mark Bouris

Money can’t buy you happiness.

My mother gave me a great gift for the Christmas of 1987. It was Noel Whittaker’s “Making Money Made Simple (1987 edition)”. I was just 12 years old, and I remember starting to read the popular book – the “Da Vinci Code of 1987” according to one reviewer – while I was still sitting under the Christmas tree.

Mum was extremely good with money, and always knew where every cent was being spent, and she was intent on setting me on a prudent and happy path to financial security also. On the flyleaf of the book she had written: “I hope you find what you’re looking for in this book, son. Just remember this: money can’t buy you happiness, but it can provide you with peace of mind. And then you’re free to discover your own happiness.”

Although she had given me a whole book on managing personal finances, Mum’s real and lasting gift to me was the wisdom of her handwritten comment – possibly the most extraordinarily memorable piece of advice I have ever received.

Andrew Lowe

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IT’S NOT A BARGAIN UNLESS YOU NEED IT. This is a simple and rather old-fashioned principle, but I would challenge anyone to deny its wisdom. It came to me from my grandfather, when I was visiting him in his home in Bathurst where he was a school teacher. When we went out shopping together I noticed how deliberately he avoided all the really interesting sale items and just stuck to his shopping list. “It's not a bargain unless you need it,” he would say.

Although it wasn’t very appealing to me at the time, these days I often reflect on the universal truth behind my grandfather’s advice. I’ve lost track of all the unnecessary “bargains” I’ve spent my money on since then, and it is indeed a sobering thought to reflect on how much I would’ve had to invest in the things that matter, rather than the long-forgotten trifles that seemed like such a good deal at the time.

Barry Lindbeck

So they say no man is an island.

No person has been born who can’t gain something from the assistance and goodwill of another person. No one person is going to be able to achieve every possible thing on their own, and so it makes absolute sense to “turn to others, when you can”.

Particularly in the business world where experience is everything – why would you pass up the chance to learn the lessons from a fellow traveller’s journey? This advice came from my boss when I was about 26 years old, still young and brash and certain I already knew it all.

Well of course it took some time for me to realise the wisdom in these words. But once I got it, it stood me in good stead in my business endeavours, and I now make a point of passing on this same advice to others – particularly those who are standing on the starting block of their careers as I was back then.

Mitchell Murphy

11

Y$U HAVE T$ SAVE Y $ UR PENNIES

I was just ten years old when my Mum told me “You have to save your pennies to get what you want”, and these words have stayed with me ever since. Do you know, the things I would have spent my pennies on back then seem pretty silly to me now.

But the small amounts that I put away then, became the kernel of greater savings – and of a life-long habit that helped me to financial independence. I look around these days and it seems the art of planning and saving for important things often takes a back seat to instant gratification, and in time this can lead to bad mistakes and financial distress. The best part of my work today is helping to educate my clients, improving their financial literacy, and identifying the common pitfalls which might rob them of achieving life’s real goals – goals like owning their dream home.

Deb Fredericks

PAY YOURSELF F1RST. I was 18 years old when I read Rich Dad Poor Dad by Robert Kiyosaki on the train travelling to university. It was Kiyosaki who famously coined the phrase: “Pay yourself first.” Like millions of other kids growing up, I had been taught the simple steps to success – like getting a good job, and always giving it your best shot.

But is this enough? Kiyosaki’s wisdom is that no, it’s not enough. There is much more you can do to secure a more successful outcome. Don’t just work harder, work smarter. And work your money in smarter ways too. When my pay cheque comes in, the first bit is set aside to be invested in my future wealth.

Only when I’ve done that, am I free to use the remainder on discretionary items, travel or entertainment. This is the essence of Kiyosaki’s advice: pay yourself before you pay anyone else.

My money works hard for me, and this is what I wish for my clients also, because I know it works.

Clyde Gonsalvez

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UTILITY

BILL PHONE

BILL

Treat savings as if it were a monthly bill.

I received some savvy financial advice once from my sister-inlaw. I was about 30 years old when she gave me this advice and I’ll never forget it. She said, “treat savings as if it were a monthly bill – as we all manage to pay our bills, but find it much harder to save.” From my experience of customers’ savings patterns, there is a universal truth to this.

We pay our monthly bills because we feel some imperative to do so – to avoid the disaster of losing a service or an asset that we rely on. Now we just need to see our savings “bill” in the same light: we pay it to avoid the disaster of dwindling wealth. I even recommend to some clients that they may consider borrowing money in order to bolster their payments to their savings “bill”. Or, as I think of it, to ‘indirectly save’. This might be in the form of investing in something like a sound investment property. This way, with a reasonable level of risk, they can sit back and watch their investment grow in value over time. This strategy, if executed correctly, is a tried and true way of generating returns and building wealth in the long term.

John Cross

Stick to what you know

outsource

anything outside of your area of expertise.

Probably the most memorable piece of advice I have ever received was from my Dad. He is 65 years old and funnily enough, just like me, he enjoyed a rewarding career in financial planning.

Dad’s theory was: “stick to what you know and outsource anything outside of your area of expertise”. Fresh from my studies, ambitious and set to conquer the financial world, do you think I wanted to hear this? I was on a mission to master every nuance of the industry, to be the best.

saved me from many an overambitious undertaking. Far better to be able to give quality specialised advice that clients can trust, than to try to cover areas that I don’t consider myself expert in. Each day I strive to ensure I can give my full service offering to clients. But whenever a situation arises for which I need to call on outside expertise, I openly acknowledge this to my clients and recommend an appropriate associate.

Jackson Millan

But there’s no louder sound than the whispered words of really good advice.

Over the years as I matured into my role as a financial planner, Dad’s words 15

A fool and his money are easily________parted.

How I wish I had a dollar for every time my father told me that. I was five years old when he first gave me that word of advice, and do you know, it is as relevant to the way I manage my life savings now, as it was to my pocket money back then. I am a cautious investor, ever vigilant when it comes to decisions affecting how I maximise, and yet protect, my hard-earned savings. My father helped me to realise that saving is a key life skill, especially in an age where there are countless opportunities to lose your savings entirely. My father’s advice is at the heart of my strategies for responsible investment, and in my turn I pass this same sage advice on to clients and associates alike.

Especially when they come to me with their latest idea for a ‘can’t lose’ investment. At the end of the day it is usually a safer bet to rely on the less spectacular but well proven methods for wealth accumulation, rather than the latest get-rich-quick thought bubble.

Sze Chuah

A dollar today is not worth one dollar tomorrow.

The piece of advice which has been most formative for my career was a word from my first year economics lecturer back during my university days. He was a very good lecturer who made economics interesting with his quirky humour and clever insights. One day he began the lecture by announcing, “One dollar today is not worth one dollar tomorrow.� It had us scratching our heads, but he went on to explain that we should seize the opportunity today, otherwise the world will move on, and if we try to take up the opportunity belatedly it will not reward us as well. Well that advice certainly has stuck. It often comes to mind as I’m explaining to my customers the effects of such factors as compounding interest, and the cost of living, on their investment dollar.

Vincent Wong

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$ Make $ money $ while you sl p.

George was our milkman. His milk van was clapped out, and he dressed to match.

He had an injury to one eye, and to tell the truth he wasn’t all that easy to look at.

At least not for us kids. With typical schoolyard unkindness I’m ashamed to say we made fun of old George.

I couldn’t believe it when Dad told me that George was really a very wealthy man.

Of course now, with the benefit of maturity, I can see that it was a mix of eccentricity and genuine modesty that led him to eschew making a show of his wealth.

I can still see, with my mind’s eye, George’s face as he looked intently into my eyes one day, and imparted the following gem of wisdom: “Make sure that you are always looking for ways to make money while you sleep”. Such simple and fine advice. But the sad thing is that I just could not understand at the time what he was trying to say. With greater maturity I have come to see the essential truth of his words, which is that you should do what you must to make your daily dollar, but at the same time try to set aside some part of your assets to work away in the background for you, building your wealth even while you go about other things.

Well, today I am a wealth manager with Yellow Brick Road, and I have never forgotten the advice of George the milkman. Imparting the truth of his strategy to my clients is what motivates me – if this allows them to realise the same benefits as I have, I will be happy that I’ve done my part in handing down the wisdom, just as George did to me.

Alec Poulsen

1800 927 927 | ybr.com.au ď‚ @ybrwealth | ď‚‚ facebook.com/ybrwealth

Disclaimer The information in this document has been prepared by Yellow Brick Road Holdings Limited ACN 119 436 083. It is general information only and is not intended to provide you with financial advice. The information has not been prepared taking into account your specific objectives, financial situation, or needs. All examples are illustrations only and results will vary as assumptions change. Before acting on any information in this document, you should consider its appropriateness to you, and seek independent financial advice. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. We have endeavoured to utilise facts, figures and statistics from independent third party organisations (e.g The Australian Bureau of Statistics and the Association of Superannuation Funds of Australia and the Australian Government Department of Human Services). Information is accurate at time of publication (May 2013).