THESE finance experts are at the top of their game.


They are some of the most qualified and most skilled financial planners in the country, and they spend their days helping others to get rich or solve their money problems. But what are the best tips they’ve come across during their careers?


The state winners of the 2013 Financial Planning Association (FPA) Best Practice Awards share their favourite pieces of advice.


Dave Rae, Beames & Associates (ACT)


Have a plan


It sounds simple but whether you are saving for a holiday, a house, children’s education or retirement, make sure you have a plan to reach your goal. Write it down and include the key actions required and the time frame to get you there. Find someone who can keep you accountable and don’t just write it down and forget about it – keep it front of mind!


Anne Graham, McPhail HLG Financial Planning (Victoria)


Invest in your education


The return on investment is far greater than any return on the stockmarket or property and it has added benefits: it can be social, flexible, enjoyable, leads to greater work opportunities and the costs can be tax-deductible. The best thing for me is I get to learn things that are very practical and I can pass this knowledge onto clients and staff. It’s a win-win-win.


Jeremy Gillman-Wells, Bravien Financial (ACT)


Pay off your home mortgage as fast as possible


Interest rates are so low, so that makes it a great time to put extra towards knocking down the principal. Consider fixing a portion of the debt for one-two years while rates are so low – especially if you know you won’t be able to pay off that part. So say you had $300,000 owing, you could fix $200,000 at a known repayment rate, and place $100,000 on variable interest allowing you to pay off as much as possible.


James Kenny, Tupicoffs, (Queensland)


Don’t be fooled by low interest rates


Although interest rates are currently at historic lows, if you’re planning to borrow money to invest then it’s important to make sure that you can afford to maintain your investment when interest rates eventually increase in the future. To be prudent I would recommend that you factor a margin of at least 300 basis points (3 per cent) to the current standard variable rate when evaluating long-term affordability. For those who have non-tax deductible debts, a debt repayment strategy is often one of the best strategies available in terms of risk vs. return.


Dante De Gori, general manager of policy and conduct at the FPA


Only invest in what you understand


When considering investments and products they can be complex and designed for sophisticated investors with many features and risks not easily understood or identified. Indeed many are structured in ways that make it almost impossible to understand the real underlying assets.

In the industry it is often referred to as the “black box” where even some professionals can’t explain how the product works. Effectively one should have a good understanding of what they are investing in – if you can’t explain what it is, how it works, the risks, the underlying assets and the costs then you should not invest in it.


Pay down non-deductible debt first


Within the industry there is often reference made to good debt and bad debt. Good debt is what we call deductible debt, this includes debt that has been used to purchase income producing assets such as an investment property or shares. The interest and costs associated with this debt is deductible in your tax return making it the good debt.


Now of course having no debt is better than deductible debt but in many cases people have what is called non-deductible debt and this is referred to as bad debt and should be paid down first. Non-deductible debt is when you borrow to purchase non-income producing assets, such as a family home, a car, a boat and a holiday. The interest and other related costs to this debt are non-deductible and should be paid down quickly and as a priority.


Any advice in this article is of a general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regard to those matters.