Investing Essentials: How a financial adviser can help

Bennelong Funds Management

August 2023

Many of us want to save effectively, invest well, and generate sufficient funds to pay for a home, children's education, travel and, ultimately, a secure retirement. But navigating a complex financial landscape can be intimidating. Fortunately, there are professionals who can guide you.

Seeking the advice of a qualified financial adviser may add significant value over your lifetime. Here is a snapshot of some of the things an adviser can assist with.

Budgeting and managing debt

In order to invest, you need to work out where the money will come from. A financial adviser can help you manage your income more effectively by carefully identifying and monitoring your spending patterns and expenses.

They can also help you get the full picture on your debt load and work out which parts are:

• 'inefficient' debt - borrowing to buy goods, services and assets that are known to depreciate in value, or have no value once used; and
• 'efficient' debt - where you buy assets that generate assessable income and have the potential to increase in value.

Insurance: the importance of security

Adequate insurance coverage to provide you and your family financial security is crucial, particularly if you are self-employed or own a business.

A mix of suitable life insurance, income insurance, business insurance and general insurance is highly individualised. Your financial adviser's expertise in this area can save you a great deal of time and worry.

Building an investment portfolio

Only after budgeting and insurance do we get to investment. Your financial adviser will gather all of the relevant information on your personal financial circumstances, objectives and risk tolerance, and help you choose the right types of investments to fit your needs, personality, goals and time horizon.

Your adviser can help you build a diversified investment portfolio, often spread among a range of asset classes to aim for positive returns while balancing the overall level of risk. What's more, they will regularly assess the plan to ensure it continues to meet your needs, altering your investments as you reach different stages of life (for example, wealth accumulation for younger investors versus a steady income stream for retirees).

The three pillars of retirement

Your financial adviser should be an expert on Australia's 'three-pillar' retirement-funding system: compulsory superannuation, the government-funded age pension, and voluntary contributions by individuals to their super accounts.

Australia's superannuation system can seem complicated, and most people can benefit from sound technical advice from a professional - whether it's to maximise the benefits, or minimise the tax burden.

What to look for

Choosing a financial adviser is an important decision. Ideally, it will be a lifetime partnership (and even a multi-generation partnership, taking care of your family's needs). You need to establish a strong rapport: they will know all about your financial affairs, your dreams and aspirations, and even how you want your affairs managed after you die.

You therefore need to ensure the person is a trustworthy and knowledgeable professional, and someone with whom you're comfortable working with over the long term, who can regularly maintain and review your financial goals as you enter different stages of life.

There are several professional bodies who may be able to assist you in selecting a financial adviser, such as the Financial Advice Association Australia's find a planner page.

For more insights visit www.bennelongfunds.com

Disclaimer

The content contained in this article represents the opinions of the author/s. The author/s may hold either long or short positions in securities of various companies discussed in the article. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely as an avenue for the author/s to express their personal views on investing and for the entertainment of the reader.

The Rate Debate - Ep 41: Uncertainty abounds

in the face of economic challenges

Yarra Capital Management

August 2023

Funds operated by this manager:

What really matters in investing

Magellan Asset Management

August 2023

Global Portfolio Managers, Arvid Streimann and Nikki Thomas dissect what's important and what's a distraction in the investment world. They talk us through where they are currently finding opportunities and how they are positioning the portfolio to benefit from structural tailwinds. Investment Analyst, Emma Henderson joins them to provide a deep dive into our restaurant holdings and why we like them.

Funds operated by this manager:

Magellan Global Fund (Hedged), Magellan Global Fund (Open Class Units) ASX:MGOC, Magellan High Conviction Fund, Magellan Infrastructure Fund, Magellan Infrastructure Fund (Unhedged), MFG Core Infrastructure Fund

Important Information: 

This material has been delivered to you by Magellan Asset Management Limited ABN 31 120 593 946 AFS Licence No. 304 301 ('Magellan') and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation.  This material does not take into account your investment objectives, financial situation or particular needs. This material does not constitute an offer or inducement to engage in an investment activity nor does it form part of any offer documentation, offer or invitation to purchase, sell or subscribe for interests in any type of investment product or service. You should obtain and consider the relevant Product Disclosure Statement ('PDS') and Target Market Determination ('TMD') and consider obtaining professional investment advice tailored to your specific circumstances before making a decision about whether to acquire, or continue to hold, the relevant financial product. A copy of the relevant PDS and TMD relating to a Magellan financial product may be obtained by calling +61 2 9235 4888 or by visiting www.magellangroup.com.au.

Past performance is not necessarily indicative of future results and no person guarantees the future performance of any financial product or service, the amount or timing of any return from it, that asset allocations will be met, that it will be able to implement its investment strategy or that its investment objectives will be achieved. This material may contain 'forward-looking statements'. Actual events or results or the actual performance of a Magellan financial product or service may differ materially from those reflected or contemplated in such forward-looking statements.

This material may include data, research and other information from third party sources. Magellan makes no guarantee that such information is accurate, complete or timely and does not provide any warranties regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material.  Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Magellan. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. No representation or warranty is made with respect to the accuracy or completeness of any of the information contained in this material. Magellan will not be responsible or liable for any losses arising from your use or reliance upon any part of the information contained in this material.

Any third party trademarks contained herein are the property of their respective owners and Magellan claims no ownership in, nor any affiliation with, such trademarks.   Any third party trademarks that appear in this material are used for information purposes and only to identify the company names or brands of their respective owners. No affiliation, sponsorship or endorsement should be inferred from the use of these trademarks. This material and the information contained within it may not be reproduced, or disclosed, in whole or in part, without the prior written consent of Magellan.

Hedge Clippings | 25 August 2023

Wow! What a funny old week that was... but then again when one stands back from the headlines, it was more like a slow moving train wreck - or in the case of Yevgeny Prigozhin's presumed mid-air "mishap", more a question of "what took so long"?  From what we can glean so far, and given that news out of Russia is curated to say the least, nothing is yet confirmed, other than the fact that a private jet crashed with the loss of all on board. Was Yevgeny among them, was he a target, or was it a way for him to "distance himself" from the long arms of his ex mate, the President? Sooner or later Putin, not widely known for forgiveness, would have found a way to extract his final revenge, either via poisoning Prigozhin's food (which would have been ironic considering he was reportedly once Putin's chef) or some other means.

If he was on the plane, it's difficult to have much sympathy. If he wasn't, the best advice would be to watch what you eat, and avoid tall buildings.

And then there's the case of Donald, once (and still) known as "President" Trump, facing up to Fulton County Jail to have his mug shot recorded for posterity, and no doubt a whole lot more, along with a dozen other of his co-conspirators. Once again Trump stole the show, having previously (according to some) tried to steal the 2020 US Presidential election, or according to him, having it stolen from him. Sounds more "banana republicanish" to us than Republican, but probably just symptomatic of where the world, or at least the US of A is heading. No doubt he'll garner even more applause and support from his followers, while (just like Prigozhin) it remains to be seen if he survives, or swaps his famous red tie for a more mundane uniform and a potential 641 years in the slammer.

Closer to home, even the government's chief media apologist the ABC was questioning the curious co-incidence of the PM's son winning the frequent flyer lottery, and ending up a member of the Qantas Chairman's Lounge. Soon to depart Qantas CEO Alan Joyce deflected questions on how that occurred, citing "privacy" concerns, while at the same time defending a full year profit of $2.47bn., and refusing to refund all or any of the close to $1billion in COVID-19 support the government handed out while he decimated the Qantas workforce. And while Qantas are enjoying record profits on the back of limited seat availability, Albo's transport minister refused to be drawn on the logic of refusing just 21 additional flights per week from Qatar Airways, citing Qantas as the "National Carrier" (actually a commercial and publicly listed company) as in the "national interest". Apparently, any benefits to the long suffering Australian traveling public don't come into the equation, maybe because Albo and co. either don't pay for their tickets, or fly on an RAF VIP aircraft.

Barring a complete fall out in the Chinese economy it looks as if Australia will avoid a major recession - unless of course Xi presses ahead with his stated intention of invading Taiwan. That would create a dilemma across the globe for governments, and businesses alike given the level of dependence on China as the world's manufacturer, and consumer. That might make Xi think twice, but in the meantime businesses are moving to reduce that dependence by moving or reducing their exposure. Either way, that's not going to assist China's current economic slowdown.

Finally, on a lighter note, we gather the Rolling Stones are quietly planning the release of a new album in September. Which brings us to the following image, or should that be the following question:

Whoever thought, back in the 60's, that Mick Jagger would still be around, let alone pumping out music?

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