Wondering if you need financial advice?

At MLC Life Insurance, we often recommend our customers consult a trusted financial adviser to help them make decisions about their policy. A financial adviser can help you understand how a policy might support you, considering your personal financial needs and aspirations.

In this article we’ll cover the essentials about types of advice and when you might ask for them.

What types of financial advice are there?

There are two types of financial advice: general and personal advice. For either type, the advice you receive can be on any of the topics that a financial adviser is qualified to deal with. These include insurance, estate planning, retirement planning, and superannuation.

General advice

General advice doesn’t consider your goals and current circumstances. The advice will be non-specific to you. In other words, your financial adviser or general advice consultant could explain how a particular policy works, but not whether it would suit your financial position and goals.

General advice can help you get more specific information about your choice of products, or to gain a better understanding of how a particular financial product works. But it can’t tell you what the best decision is for you.

Personal advice

Personal advice is a recommendation based on your unique circumstances. Your adviser considers your current income, assets, liabilities, debts, goals and risk tolerance, and develops a solution they think will meet your needs.

You can ask for personal advice for a single financial issue. Alternatively, you can ask for help to develop a comprehensive financial plan – or receive ongoing financial advice.

Only suitably qualified and registered Financial Advisers can provide personal advice. It also tends to be more expensive than general advice because it is typically more complex and involves significantly more time and effort on behalf of the adviser.

When should you ask for financial advice?

When it comes to financial advice about insurance:

General advice can help if you:

• want to compare or understand different insurance products,
• want to understand how insurance may work as part of an overall financial strategy, and
• don’t want to pay for personal advice.

Personal advice may be more appropriate if you:

• have a complicated financial situation,
• are about to experience, or have experienced, a significant life event,
• need help managing someone else’s financial affairs, and
• want to arrange a certain insurance product but have specific requirements; for example, you want to take out life insurance but have a pre-existing medical condition.

When can MLC Life help?

We recommend you review your insurance every three years to ensure it still meets your needs. You can always get in touch with us to ask about reviewing your policy.

If you want financial advice and aren’t sure where to start, we suggest reading MoneySmart’s article on choosing a financial adviser.