Financial Planning Advice for Employees

Financial planning advice for employees is just as important as it is for any wealth accumulator concerned about the security and effectiveness of their investments. We discuss the importance of financial planning advice and situations that should trigger a review of your circumstances. It becomes obvious that superannuation is a critical asset for most employees – and their families. Measures available for employee financial advice and servicing, include –

• superannuation accounts: are they invested appropriately? – and
• other wealth asset protection and security, meeting financial goals.

Employers can reap benefits from facilitating access to financial planning advice through the workplace: a secure and happy employee is more likely to be a loyal, long-term employee.

What does financial planning advice include?

Effective financial planning encompasses financial situations for all stages of life. Notable inclusions are –

• asset accumulation of wealth through a savings phase;
• asset protection. (adopting strategies to ensure that accumulated wealth retains its value in most circumstances.);
• lifestyle budgeting. (considering the need to balance immediate needs with future goals. Achieve this by keeping current expenses lower than income, leaving some to accumulate to satisfy future needs, is important.);
• estate planning. (documenting what will happen to accumulated assets in the event of the owner’s demise. Ensuring that loved ones are financially provided for in a timely and adequate way.); and
• retirement planning. (implementing strategies ensuring a comfortable lifestyle is funded for the duration of your retirement.).

Whilst these stages are applicable to most employees, too many of them rely on their superannuation trustee to manage their largest financial asset. They do this despite the fact that the trustee knows nothing about them or their financial circumstances. Superannuation trustees are only able to provide financial planning advice for employees to the extent that it relates to their superannuation account.

What financial planning advice is available for employees?

A significant portion of the Australian population now has a superannuation account (too many with more than one).  Their involvement in monitoring how their superannuation account is invested is important.  Fewer than 25% of employees are said to take any effective interest in their superannuation account.  Less than 5% actually engage with their account trustee!  Most leave the management of their superannuation investment to a default position determined by the trustee.

Employee superannuation accounts are only one element of wealth accumulation and management. If you hold such an account you may be unaware of the default settings on that account. You may see that there is life insurance in the account, but do you know if it is adequate?  Are you comfortable that –

• Definitions of cover provided in the policies allow for a claim to be paid in a time of need?
• You can see that your accumulated account balance is earning a stated rate of return? (…and is that rate of return satisfactory?)
• Do you know whether the assets in which the account is invested, are appropriate to your investor risk profile?
• Do you know what your investor risk profile is?

Employers may be interested to read the article published on our Blog page under the title, Business superannuation an employee benefit.

What has the Press had to say?

The Head of Financial Advice at Sunsuper had the following statements attributed to him in an article published in The Sunday Mail on 5 February 2012. (The words in brackets in the quote below have been paraphrased by the author of this article):

• I would just caution people to call and talk to someone who isn’t emotionally involved before they (reduce the risk-based asset allocation in their accounts);
• We can stop people making mistakes and reacting to adverse market conditions and also provide guidance and recommendations to people when they are looking at these decisions; and
• All our research indicates that people who receive comprehensive (financial planning) advice early on are better off in retirement than those who do it themselves and those who leave it to much later.

Whilst Patrick White’s remarks as paraphrased above were directed specifically to the superannuation aspects of members’ financial positions, we certainly support them. We enhance their intent by encouraging employees to seek comprehensive advice regarding their personal financial goals and aspirations.

What financial planning advice is beneficial for employees?

Financial planning advice for employees is available in a range of circumstances.  Seek financial planning advice at times including –

• commencing a new job/ income stream;
• acquiring/ accumulating substantial assets;
• incurring debt;
• establishing/ changing life partnerships/ adding children; and
• accident/ illness diagnosis.

Does financial planning advice for employees, relate only to their superannuation account?

The key wealth management/ financial planning strategies that apply to the above circumstances are:

• investment strategies. (cashflow management; debt management; and investment asset allocation);
• personal risk strategies. (insurance to protect the source of income; and to provide for goals not yet achieved);
• estate planning strategies. (a valid and well-considered Will is vital.  So also are relevant powers of attorney, for the disabled, the vulnerable, and for survivor beneficiaries.   Spouses and/ or children are key triggers in these regards); and
• retirement planning strategies.

Superannuation accounts can be effective tools in managing some aspects personal investment strategies. Personal risk (life) insurance is available in superannuation accounts and should be considered where appropriate. Exercise care and due diligence in utilising life cover in this structure.

Insurance within superannuation can be linked to a personally held life policy as an effective strategy.  Premiums are paid proportionately from the superannuation account and from personal financial resources in such a situation.

Whilst superannuation accounts form part of the solution in the above cases, it forms part of the asset base to be resolved in the case of estate planning  and retirement planning.

How can financial planning advice for employees be accessed?

Continuum Financial Planners Pty Ltd is a privately-owned financial planning advisory firm.  We offer personalised, professional wealth management advice that is tailored to the individual needs, goals and objectives of investors generally.  This includes members of employee superannuation funds, or as a packaged service e through employers.

Our experienced advisers work to the mantra that – ‘we listen, we understand, we have solutions: and we care’.  To access these services, focused on your best interest, please –

• call our office (on 07-34213456), or
• at your convenience, use the linked Book A Meeting facility provided.

Our advisers can meet with you on a no commitment, no fee basis to determine whether we are able to satisfy your particular needs. If so, you can engage us on a fee for advice/ fee for service basis. In many cases any agreed fees can be paid from the member’s superannuation account.

(This article was first published by us in July 2012.  We have occasionally refreshed/ updated it, most recently in January 2025.)