With the right advice from experienced financial experts, people can achieve up to four times the wealth they could achieve alone, says GCI Wealth.
Speaking ahead of the Investment & Retirement Expo, boutique financial planning and investment group GCI Wealth said too many people implicitly trust their companies, who are taking their cue from insurance firms, when it comes to planning for their retirements.
GCI Wealth CEO Alex Cook believes this is a mistake. “Often, employee benefit companies sell the wrong message to employers – they sell them the concept that retirement is the end goal. Many umbrella funds use ‘life stages’ models whereby investments are more aggressive in a person’s 20s and more conservative approaching retirement age. But there are shortcomings in these traditional models. They may overlook the fact that retirement is not the end goal – people could be retired for as many years as they worked. Therefore retirement savings must be able to sustain the individual comfortably for 30 years or more.”
When this is taken into account, most people discover that they have not provided adequately for their retirement, says Cook. “At that stage, there are four options: they can reduce their retirement income expectations, increase their retirement savings for several years, delay retirement or they can adopt a more aggressive risk profile in their investments. Which options are appropriate will depend on each person’s age and circumstances.” Changes in legislation have added to people’s confusion as they consider their retirement options.
Cook says: “What people need is an advisor who will help them determine what they need and ensure that their savings last throughout their retirement years.”
He cites research conducted in Canada by CIRANO on the value of financial advice. The analysis found that expert financial advice has a significant impact on average investable assets, which increases steadily by age. An average household age of under 45 realises assets averaging around $24,787 without advice and $79,074 with advice. The benefits of advice grow exponentially, so that in a household with average age of over 65, investable assets without advice average $66,064, in contrast with $272,761 with advice. The research concluded that the impact of advice in wealth is greater as the tenure of the advice increases. It noted that advice positively impacts wealth accumulation and retirement readiness.
While the benefits were greatest in those who had had expert advice for over 15 years, Cook says it is never too late to seek help in maximizing investments and retirement savings. “We participate in the Investment & Retirement Expo every year, and often encounter people who are seeking advice for the first time only a few months ahead of retirement. Ideally, retirement planning should begin in your youth, but your financial standing can be improved at any age, with the right advice.”
He notes that the choice of financial advisor is important, however. “A good advisor should be reputable, independent, and have a solid infrastructure and track record. Critically, they should have a mission statement focused on improving their clients’ well-being and helping them achieve the ‘why’ goals of their retirement.”
GCI Wealth, with a 14 year track record and managing over R1 billion on behalf of its clients, will field a team of over 15 expert advisors at the 2014 Investment & Retirement Expo, offering advice to companies and individuals on the most effective staff policies and investment and retirement plans.
Should you be unable to attend the Retirement Expo, please contact us, and one of our consultants will arrange a Portfolio Review / Investment Consultation.
011 768 1022