So, you’ve made the decision. It’s time to put on your serious-lady-suit (Romy and Michelle style) and get busy with money.
Whether daunting, exciting – or both – you need to start somewhere.
And that’s where it can come undone. What do I choose? How do I choose? What should I ask?
All very good questions. I can’t promise I will answer all of them, but let me give you some starting points on your journey.
I want to invest in ETFs
Exchange-traded funds are a popular, low-cost way to invest in a range of asset classes, from shares to bonds. I’ve written more about them here.
If you’ve done your research and want to get started, first thing you need is a broker. As the ‘exchange-traded’ name suggests, ETFs trade on the Australian Securities Exchange. While the days of guys shouting at guys on chalkboards are over, brokers still need to do the trade for you. There are lots of well-known online ones like CommSec, but the nerds in the forums I hang out in reckon Selfwealth is the cheapest.
If you don’t want to go down that road, you can consider an app like Raiz or a Roboadviser (see below), and they do that part for you.
In terms of choosing which ETFs, you really need to spend some time with your friend Google.
I want to invest in a Managed Fund
Rather than buying or selling units on the ASX, like with an ETF, you apply for units in a managed fund, directly to the company. There is usually a form to fill in (online or paper), you give them money and they give you units in the fund.
There is also an ASX service called mFund, which allows you to bypass the old form-filling grind. It does require a broker or financial adviser though – so if you have neither of those, probably not worth the effort.
In terms of how to choose a managed fund, it’s kind of like saying ‘how do you choose a dress?’. Do your research, have a clear idea of what you want, keep a keen eye on prices (fees), and get recommendations from friends. There is a handy tool on the mFund site to get you started.
I want to get Financial Advice
First up, be clear on what you want and how much you want to spend. (This post may help).
Money Coaching – this is the mani-pedi of the advice world. It helps you with goal-setting, budgeting, cashflow, saving, and everyday money goals. It’s more like a life coach, in that it’s not regulated by ASIC and they can’t legally tell you what to do with your savings – they mainly help you accumulate the money. Sometimes they have affiliated services to take you to the next stage.
I see a lot of people who think they want financial advice, but really want money coaching. It’s way cheaper because there isn’t a bunch of expensive compliance sitting behind it.
People like Vivian Goh are leading the charge in this area.
Robo Advice – Let’s call this the fractional laser treatment of advice: yay technology! These services use powerful algorithms to give you an investment plan. You tell them your goals, and the friendly robot builds a portfolio to achieve them. Stockspot and Six Park are two of the bigger players in Australia – they have lots of helpful articles on their websites, with more information.
Comprehensive Financial Advice – This is the full day spa treatment of advice with a price to match. It looks at your whole financial picture: goals, retirement planning, risk tolerance, tax issues etc. But it takes a lot of time and compliance on the adviser’s side, so you’re looking at upfront fees or $3000-4000 or more, with the option of ongoing service (and fees).
How to find an adviser? Check out this post.
I want to sort out my super
So, you want to merge multiple accounts, check your insurance, review your investment options or generally find out WTF is going on with your retirement savings (yeah girl!).
Call your main super fund. If you want to roll multiple accounts into one, the fund will do the heavy lifting for you. If it’s other questions, they are generally pretty helpful and can often provide ‘limited advice’ at no cost.
Don’t know which one you should pick? The big-name industry funds are pretty solid, but you can also check out this website for more information.