Retirement, redundancy and everything in between

The main public sector union in the ACT recently declared that more than 5000 job cuts have been announced Australia-wide since the Coalition government took office, and some estimates have the figure at well over twice that amount. With numbers like these appearing regularly in the headlines, public sector employees have every right to feel concerned.

And job losses aren’t limited to the public sector; you only have to think about the demise of Holden to know that for many Australians, employment security may be a thing of the past.

We all hope that dire predictions about the number of redundancies on the horizon may well be exaggerated, but the harsh reality is life can take everyone by surprise at different times. Which brings me to my point. As financial planners, we realise that more often than not, life events, good or bad, expected or out of the blue, have potentially serious financial consequences.

This means that the best service we can offer our clients is to give them the advice they need to take their finances in hand, sooner rather than later, in a way which meets their specific needs. As a financial planner, you need to be ready and able to provide professional and targeted advice on any number of issues, quickly and conveniently.

Take redundancy for example. Employment conditions for both public and private sector employees differ according to legislation, industrial awards or agreements, and these in turn vary according to the job of an individual.

The same principle applies to decisions surrounding retirement. Even though retirement is an event which is usually planned for, it is nonetheless crucial to communicate to clients that the sooner they start preparing for it the better it will be and the more likely you are to help them achieve the retirement they want. Clients need to be able to call on your knowledge, when they need it so they can make the right financial decision, when faced with choices such as voluntary redundancy.

This is particularly true of public sector employees, many of whom are in defined benefit schemes, which operate quite differently from the accumulation schemes that the majority of Australians contribute to.

Decisions about how and when to retire, whether to take a lump sum or a pension, for example, can impact significantly on their quality of life in retirement. That’s why it is so important to continually refresh your knowledge, particularly with respect to the very specific rules and conditions surrounding public sector superannuation schemes in order to be able to provide the advice that clients need.

The same goes for public sector employees changing jobs within the public sector or potentially moving out of the public sector altogether. Questions about whether or not employees can continue in their current superannuation scheme, how their existing scheme interacts with any future schemes and how best to plan for retirement are all potentially complex problems that a specialist financial planner needs to be able to solve. Given the recent waves of legislative changes surrounding both financial advice and superannuation, staying up-to-date of these changes is crucial if you wish to be in a position to interpret what they mean to your clients and your business.

Being well informed so you can give the right advice for major life events is only one part of the advice picture. Further consideration should be given to the way in which your clients wish to access advice. While face-to-face meetings may be preferable, for some clients, telephone consultations can provide much needed help in a more accessible way, particularly if they live in an area where professional financial advice is not readily accessible.

The bottom line? Financial planners need to be ready and able to provide specialist professional advice to clients when and how they need it, particularly in a climate where unexpected changes in circumstances are common. This means really understanding each client’s unique situation. Don’t wait for your client to realise what events may lie around the corner – often by the time they reach that point, it is too late.

Disclaimer:

State Super Financial Services Australia Limited (SSFS) is the holder of Australian Financial Services Licence 238430, ABN 86 003 742 756. This information is of a general nature only and is not specific to your personal circumstances or needs. It is published for your interest. Before making any decisions based on this information you should consider its appropriateness to you. Every effort has been made to ensure the information contained in it is accurate. We strongly recommend that you consult a financial planner before taking action based on this information.

About Judy Brown

Judy Brown is regional manager for Canberra at State Super Financial Services. She has 29 years’ experience in the finance industry, with 11 of those working as a financial planner. Judy moved to Canberra in 2011 from regional NSW where she had lived for 20 years. Judy enjoys travelling overseas and fundraising for The Starlight Foundation.