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It’s your life and your money, but financial advice can help

I am aged 59, my wife is 58 and our two adult children have moved out. I took a redundancy in 2020 and my wife and I do part-time contract work, earning about $80,000 and $40,000 a year, respectively. Our Melbourne home is worth about $1.5 million, and we have an investment property in regional Victoria, bought in 2011 for $290,000 and now worth about $850,000, but needing $30,000 in repairs. I have $680,000 in superannuation and my wife, $270,000, and we both plan to transition to retirement in the next 12-18 months. A financial advisor has quoted $3000 for a statement of advice and then ongoing fees of $200 a month each. We would like to renovate the investment property, move there for about 12 months, sell our Melbourne house and use that money to buy a smaller Melbourne property, as we have aging parents there. We would then sell the investment property. We need advice to time these various steps. Is this a sound strategy and is the price quoted for advice good value for money? AB

If you feel you need financial advice, the quote is roughly in line with the average for investment advice. It may appear high, but it is being driven up by the high costs of compliance, along with Australian Securities and Investments Commission fees.

The cost of obtaining financial advice is climbing.Credit:

As long as you do not take on any debt and can continue to earn your current incomes, which I assume meet your expenses, I cannot see why you should not do what you want to do. It’s your life and your money.

The one thing I would point out is that you do not appear to have enough in super on which to retire at a relatively young age and, if you start drawing transition-to-retirement pensions, you would be reducing your retirement savings. So, it is arguably important that you keep earning income and maximizing your savings.

If moving out of the city means giving up your income, perhaps it would be better not to do so, and thus not spend money on renovating a regional property at a time of falling prices.

In a recent column, you commented “Just ensure you have receipts” when referring to share trades. This is a real problem for will executors or those exercising a power of attorney over another’s affairs. Capital gains tax has been around for about 40 years. However, many shareholders have used a “set and forget” approach, especially for blue-chip shares paying regular dividends. Often, a solicitor or tax agent have sold their practice, or a stockbroker’s records do not go back that far. Does the Australian Taxation Office acknowledge these situations and provide any guidelines where it is almost impossible to turn up the original paperwork? RJ

To the best of my knowledge, the ATO does not. When I have asked, the reply is simply that it requires taxpayers to keep good records.

Look for the taxpayer’s Securityholder Reference Number (SRN) or Holder Identification Number (HIN) on any correspondence.

The SRN or HIN is a unique identifier for shareholdings within a company. It can often be found on an initial holding statement, or on the butt of a dividend check or payment advice. Share registrar records should give a date of purchase.

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