How much does it cost to see a financial advisor in Australia?

Australia is one of the richest countries in the world. With perks come downsides too. Living in a rich country is not easy. One needs to pay high taxes to live in such an economy. However, the tax system of Australia is quite well developed too.

Citizens have several options for calculating their tax records. One can either use government-provided web service for tax filing or hire a private company to do their taxes.

Do you feel that you are paying more tax than you should? Or calculating your annual tax seems like a hassle. So, we have a solution for you. A financial advisor can go a long way. It can help you with your retirement plans and have a clear financial plan.

The most important thing in tracking the finances is calculating the net income after expenditures. So, a financial advisor can help increase your savings. It will maximize your opportunity for growth and over the years, compound interest may help you retire early. So, how much does a financial advisor cost in Australia? Let’s dive into it.

Tax filing options in Australia:

There are various tax filing options in Australia that citizens can opt for. The choice of the option depends on one’s budget and the type of tax filing required. These options are:

  • myTax portal.
  • Hiring a registered tax agent.
  • Filing tax return papers.

Cost of hiring a financial advisor in Australia:

The cost of hiring a financial advisor depends on the type of services required. They will charge you according to the time given and the tax filing is done. It generally costs between $2500 and $3500 annually. The final rate will be determined according to the financial planning association (FPA).

Fixed fee of financial advisors:

Statement of advice fee (SOA):

This is the fee of a document that contains the financial advice given to the client by their financial advisor. It is paid only once and full at one time. One can either pay this fee upfront or it can be deducted from the investments. Another option is that it can be added to the ongoing service fee to be paid by the client.

The fee to implement financial advice:

This is also to be paid only once. It can be upfront. The exact amount to be paid is determined by the value of your assets. This fee is required for opening accounts and purchasing investments.

Fee for ongoing financial advice:

This fee is to be paid monthly. However, you may pay it once depending on the contract you sign with your financial advisor. This fee is paid for several services that include; reviews, reports, phone calls, emails, and newsletters.

Review fee:

The review fee is also to be paid only once. It is charged for reviewing the client’s financial plan and making any required changes to it. These are the crucial changes required to align one’s investments with goals.

Investment platform fee:

This fee is to be paid for the administrative financial platform which manages your investments. This is an online platform that can be used for purchasing and selling funds. One can see a summary of their investment and the fee charged is based on the amount being invested through the platform.

Hourly rate:

The fixed per hour fee charged by the financial advisor to answer one on one questions of the client. These do not include a fee for any ongoing service.

Service fee:

This is the fixed fee charged for any type of financial service being provided by the financial advisor.

Asset-based fee:

This is the percentage fee. It is determined by the total amount of assets in the client’s portfolio. This fee is to be paid regardless of how well one’s investments are. It increases with an increase in the client’s assets.

Investment management fee:

This fee is agreed upon depending on a particular benchmark. It depends on how well our client’s investments doing.

Documents required for tax filing:

When tax is being filed, several types of documents are mandatory. These documents work as a bonafide and provide evidence to the tax office. The documents required when filing taxes are;

  • Bank statements and account details.
  • Payment proof from all your employers.
  • Receipts of all your expenses.
  • If married, spouse income statements.
  • In case you have a private health cover, insurance information papers.
  • Summary of payments from Centrelink.

Remember to prepare all these documents before filing taxes along with your detailed documents.

Insurance commission:

This is an alternative option given to the client by the financial advisor. This can be paid instead of paying an upfront fee. If one chooses a commission fee, then it will be a higher premium. This applies to the insurance commission policy.

How to check if you are paying the right fee?

When you pay a fee for any service to a financial advisor, you should make sure that you are not charged a higher amount. The client’s paying fee annually receives a fee disclosure statement on an annual basis that outlines all the details of the fee being paid. You can check it in the following ways:

  • The advisor is charging you a fee for only the services they are proving and that you are not charged any extra amount.
  • Ask the advisor if there is a rise in any amount of fee.
  • Make sure that your advisor is actively managing your portfolio and not just monitoring your investments. This is checked in case of the client pays an investment performance fee.
  • You should be clear about the fact the asset-based fee charged is as per your portfolio and you are not charged any extra amount.

Points to consider when filing taxes in Australia:

One needs to keep in mind certain points when filing taxes in Australia . These include;

  • Tax return costs are tax-deductible.
  • To avoid any fines and penalties, lodge your tax refund claim before 31st October every year.
  • Make sure that your tax file includes all income data entry from 1st July to 30th June.
  • You need to pay the tax return price if you hire a tax agent to lodge tax on your behalf.

Conclusion:

When filing for taxes in Australia make sure you see all your options. You can also ask your financial advisor for a customized plan. Keeping in touch with your advisor will help you understand better about improving your investments.