Case study: Turning one couple’s financial dreams into reality
Financial planning can help you identify your financial goals and increase your chances of creating wealth.
“A goal without a plan is just a wish.”
There are many reasons why someone may need to speak to a financial consultant. Perhaps one of the most overlooked reasons is that a financial adviser can help you pinpoint your financial goals and objectives – regardless of your life stage.
This was the case for Simon Hains, 37, and his wife Lauren, 36. Recently married, they had a vague idea of what they wanted – but it wasn’t until they sat down with a Mercer financial adviser that they really started to understand what they wanted to achieve – and, more importantly, how to create a wealth management plan.
Like many people in their 30s, Simon and Lauren knew they wanted to buy a family home – and they knew they wanted children – so what did this all mean? Would they be okay financially? Could they achieve the ‘great Australian dream’ of home ownership? If so, how long would it take to achieve their goals?
“We had already read some financial guides and had all our money going into certain ‘buckets’ – most of our financial admin was already tidy, but we needed a realistic plan to work towards buying our home,” Simon recalls.
After understanding the goal, and taking the couple’s current financial situation into account, the financial adviser ran several scenarios for Simon and Lauren to help them understand what it would take to buy their home. This included establishing how much they needed to save, and whether they should try to buy a home in Sydney (where they were currently living), or if they should move back to Simon’s native Adelaide to buy a property.
“The adviser was also good at providing guidance and insights into other ‘realistic future costs’ with regards to our budget,” Simon says. “What about holidays and other expenditure? How would it look if we went down to one income while Lauren was on parental leave? And what about childcare fees? He really helped us to factor those future costs into our decision-making – most of which we had not thought about and we had no realistic idea of how they would impact our savings moving forwards. We discovered some harsh truths while looking at our financial situation – the hidden cost of adulting, some people might say. However, it was good to factor this guidance and realistic costs into our planning – thanks to the adviser.”
In addition, the financial adviser checked that Simon and Lauren had the correct insurance. As Simon notes, “Lauren is a nurse and it turned out she needed different insurance to what we had. Did it make sense to have insurance within our super? It turned out that it was more cost-effective to have some of our insurance outside of super. This is something we would not have known had we not spoken to an adviser.”
Additionally, the financial adviser encouraged Simon and Lauren to set up a will as part of their estate planning so that, if the worst happened to either of them, they would be protected and remain financially secure.
Simon and Lauren ended up with a detailed plan, which will hopefully result in them purchasing their ‘forever home’ towards the end of 2023 – in Adelaide. In addition to ensuring they are protected through insurance and estate planning should anything happen.
“It became clear looking at the various scenarios that we would be able to purchase a home in Adelaide much earlier than if we had stayed in Sydney,” Simon says.
He now agrees with 79% of Australians who say that their primary reason for using a financial adviser is because advisers have expertise in financial matters that they do not have".
“Lauren and I felt much more reassured by having a financial plan and having a good understanding of things that may affect our long-term savings – something we were quite naïve about before. We also knew what we had to do to achieve it and that was worth the fees for the advice. We’re definitely better off now than we were prior to speaking to an adviser. The real value is in their expertise that we don’t have”.
To create their financial plan, Simon and Lauren sought financial planning through Mercer Financial Advice.