Five questions you should ask your financial planner right now

If you haven’t already, you will soon receive your annual statement from your super fund. When you open your email, you will probably see that over the past 12 months your super fund has provided a negative return.

Let’s be clear, a negative return over 12 months means you have less money invested at the end of the financial year than you had invested at the start of the financial year. That’s before accounting for your withdrawals.

In a year when the cost of living rose by more than six percent, it’s a challenging outcome.

Negative returns should be expected from time to time, but that doesn’t make them any easier when they happen. And it’s certainly not helpful when super funds patronise their members with cliches and platitudes.

Representing you, not your super fund

That’s why it’s important to get beneath the surface and hold your super fund accountable for their returns. Holding super funds accountable for their performance is a vital role that independent financial planners play.

It works because independent financial advisers work for you, not your super fund.

Here are the five questions you should be asking an independent financial planner:

1. Why have my retirement investments performed poorly?

Your super fund will know its exposure to markets and individual assets. It will have done what the experts call an “attribution analysis” to understand which sectors and investments underperformed.

It’s your money, so you deserve to know the results of the attribution analysis. What did your super fund get right and what did it get wrong?

2. How has my super fund responded?

The Nobel prize winning economist Paul Samuelson once quipped “When the facts change, I change my mind”.

What has your super fund learned over the past year and what has it done in response? Has it modified its approach in any way and what underlying holdings have changed?

3. Am I still on track?

It’s unlikely that your long-term plans have been skittled by the recent downturn.

But for peace of mind ask your financial planner for an up-to-date cash flow projection. Has the combined impact of recent inflation and the market downturn impacted on how much you can spend in retirement?

4. Have any opportunities arisen?

There’s a reason market falls of 10 percent are called market "corrections". Assets are repriced and what was once expensive might now be good value. Have the recent market falls created any opportunities to buy? Is your super fund scouting around for these opportunities?

5. What should I be doing next?

During periods of the uncertainty, it’s essential to get personal advice, specific to your unique situation. Rules of thumb or general advice aren’t helpful at times like this.

So, check in on your progress by reviewing your retirement strategy. As independent financial planners, we sit on your side of the desk, making sure your super fund is held accountable and giving you confidence you’re doing everything you can to make the most of your financial circumstances.

Daniel Crump is the founder of Daniel Crump Financial Planning. This article is general and does not consider your personal circumstances. If you would like advice specific to you, give us a call on 0418 148 622.