Choosing an adviser for your Approved Retirement Fund (ARF) is an important decision as you approach or enter retirement. An ARF may remain invested for many years while providing you with an income and flexibility over how you use your retirement savings. The decisions made at retirement — and the decisions that follow — can therefore have a significant impact on your financial position over the years ahead.

The right adviser should offer more than the ability to arrange an ARF. You should consider their experience in retirement planning, investment philosophy, approach to risk and withdrawals, access to investment solutions, remuneration, total costs and the quality of their ongoing service.

This guide looks at what to consider, the questions worth asking and some of the common mistakes to avoid.

The Value of an ARF Adviser Goes Beyond Investment Performance

Investment performance is naturally one of the first things people consider when choosing an ARF adviser.

1. Which funds have performed best?
2. What returns should I expect?
3. Which provider has the strongest investment options?

These are reasonable questions. Returns matter, but they are only one part of successful retirement planning.

Once you retire, investment decisions have to work alongside income withdrawals, taxation, changing circumstances, investment risk and the possibility that your retirement could last for several decades.

A good adviser should therefore help you consider questions such as:

• How much income can I sustainably withdraw?
• How much investment risk is appropriate?
• How should the portfolio respond to market volatility?
• How might inflation affect my future income?
• How can my strategy adapt as my circumstances change?
• Are the costs reasonable for the service being provided?
• How do my retirement plans fit with my wider financial and estate-planning objectives?

The value of advice is therefore not simply about finding an investment that performs well.

It is about making better decisions before, during and after periods of uncertainty.

Investment Returns Versus Decision Value

Two retirees could have similar portfolios and experience the same market returns, yet achieve very different outcomes.

One may panic during a market downturn, withdraw too much, ignore rising costs or fail to adapt their strategy as their circumstances change.

Another may maintain a disciplined approach, review their income requirements regularly and make changes when there is a genuine reason to do so.

The difference is often not the market return. It is the decisions made along the way.

An adviser cannot predict markets or eliminate investment risk. What they can provide is expertise, perspective and a structured approach to help you make informed decisions over the long term.

That is an important distinction when assessing the value of financial advice.

10 Things to Look for When Choosing an ARF Adviser

1. Specialist Retirement Planning Experience

Retirement planning is different from simply accumulating wealth.

Before retirement, the focus is often on building a pension fund over a long investment timeframe. Once retirement begins, the priorities become more complex.

Your investments now need to support your income while also considering longevity, taxation, inflation, investment risk and your longer-term objectives.

Look for an adviser with meaningful experience advising ARF clients and ask how significant retirement planning is within their practice.

An experienced adviser should understand issues including:

• sustainable retirement income;
• investment risk;
• sequence of returns risk;
• inflation;
• longevity;
• withdrawal strategies;
• taxation; and
• longer-term estate-planning considerations.

The transition from building wealth to managing it requires a different approach.

2. A Clear Investment Philosophy

Your ARF portfolio should have a purpose.

It should not simply be a collection of funds selected because they have performed well recently or happen to be fashionable.

A professional adviser should be able to explain:

• why particular investments are suitable;
• how risk is managed;
• how the portfolio is diversified;
• how the strategy supports your retirement objectives; and
• how it may evolve as your circumstances change.

Markets and economic conditions will inevitably change. A good investment philosophy does not depend on predicting every market movement.

The important question is not:

“Which investment has performed best?”

It is:

“Why is this investment strategy appropriate for my retirement?”

3. Understand How the Adviser Is Paid

You should understand exactly how your adviser is remunerated before proceeding.

This is important not only because of the cost, but because transparency allows you to understand the basis on which advice is provided.

Ask:

• How are you paid?
• What initial fees apply?
• Are there ongoing adviser charges?
• What other charges apply to the ARF?
• Does remuneration differ between different solutions?
• What service do I receive in return?

You should be able to see clearly what you are paying, why you are paying it and what you receive in return.

4. Consider the Investment Solutions Available

The number of providers or funds an adviser can access is not necessarily the most important consideration.

What matters is whether they can assess the available solutions and explain why one is appropriate for you.

Ask:

• What investment solutions can you consider?
• Are you restricted to particular providers?
• What alternatives have been considered?
• Why has this solution been recommended?
• What are the costs and benefits?

The recommendation should start with your circumstances and objectives, not with a particular product.

5. Understand the Adviser’s Approach to Retirement Income

For many ARF investors, one of the most important decisions is how much income to take.

Withdraw too much early in retirement and you may reduce the portfolio’s ability to recover from market falls and increase the risk of your savings running out later.

Withdraw too little and you may unnecessarily restrict your lifestyle despite having built up retirement savings for that very purpose.

There is no single withdrawal strategy that is right for everyone.

Your adviser should consider:

• How much income do you actually need?
• How sustainable is that level of income?
• Should withdrawals change over time?
• How should withdrawals be managed during periods of market stress?
• How should today’s lifestyle be balanced against future financial security?

Income planning should be considered alongside your investment strategy rather than in isolation.

6. Understand How Retirement Risks Are Managed

Retirement introduces risks that can become particularly important when you are taking withdrawals from investments.

Sequence of Returns Risk

The order in which investment returns occur can materially affect retirement outcomes.

A significant market fall early in retirement can be particularly damaging because withdrawals continue while the portfolio is reduced in value.

An adviser should understand this risk and consider how investment strategy, diversification and withdrawal planning can work together to manage it.

Inflation Risk

Retirement can last for decades, making inflation an important consideration.

An income that provides a comfortable lifestyle today may not have the same purchasing power in ten or twenty years.

Your strategy should therefore consider not only your current income requirements but how those requirements may change over time.

Longevity Risk

You may need your retirement savings to support you for longer than originally anticipated.

A good retirement strategy should therefore consider the possibility of a long retirement rather than focusing solely on immediate income.

Behavioural Risk

Market volatility can be particularly difficult when your pension is also providing your income.

An adviser can provide perspective during difficult periods and help you distinguish between short-term market movements and genuine changes that require action.

7. Look Beyond Cost to Overall Value

Charges matter. Even relatively small differences in annual costs can become significant over a long retirement because those costs are incurred year after year.

However, choosing the cheapest adviser or investment solution does not automatically mean choosing the best value.

The better question is:

“What value am I receiving for the cost?”

Ask for all costs to be explained clearly, including where applicable:

• Annual Management Charges (AMC);
• Total Expense Ratios (TER);
• Broker setup Fees

You should understand both the cost of the investment and the cost of the advice.

For more information, see our guide to ARF Charges and Investment Options.

8. Assess the Quality of Ongoing Advice

Establishing an ARF is not necessarily the end of the planning process.

Your income requirements can change. Markets will move. Tax rules may evolve. Your priorities may change.

Ask:

• How often will my ARF be reviewed?
• What does a review involve?
• Will my withdrawal strategy be reviewed?
• Will my investment strategy be reviewed?
• What happens if my circumstances change?
• Who will contact me if action is required?

A meaningful review should go beyond checking whether your investments have gone up or down.

The purpose is to establish whether your overall retirement strategy remains appropriate.

9. Choose an Adviser Who Can Explain Their Recommendations

Retirement planning can involve complex issues, but complexity should not prevent you from understanding what is being recommended.

You should be able to understand:

• what is being recommended;
• why it is being recommended;
• what alternatives were considered;
• what the risks are;
• what it will cost; and
• how it relates to your objectives.

Expertise is not about making things sound complicated.

It is about making complex decisions easier to understand.

10. Consider the Long-Term Relationship

An ARF adviser may be someone you work with for many years.

Your priorities may change during retirement. You may become more focused on income, capital preservation, family wealth or estate planning.

A good adviser should take the time to understand what matters to you and build a strategy around those objectives.

The relationship should therefore be about more than establishing an ARF.

It should be about having someone who can help you make informed financial decisions as your circumstances evolve.

The Difference Between Advice and Arrangement

There is an important difference between arranging an ARF and providing genuine retirement advice.

Arranging an ARF is a transaction.

Advice is an ongoing process of understanding your circumstances, assessing your options and helping you make informed decisions.

That distinction matters because retirement is not a single financial event.

Your needs can change, markets can change and the strategy that was appropriate when you retired may not remain appropriate indefinitely.

The adviser you choose should be capable of helping you navigate those changes.

10 Questions to Ask Before Choosing an ARF Adviser

Before deciding who should advise you, consider asking:

1. How much experience do you have advising ARF clients?

Find out how significant retirement planning is within the adviser’s practice and how frequently they work with ARF clients.

2. How do you approach investment decisions?

Ask how they determine the appropriate level of risk, diversify portfolios and connect investment decisions to retirement objectives.

3. How will you help me manage my retirement income?

Ask how withdrawals will be determined, monitored and adjusted over time.

4. How are you paid?

Ask for a clear explanation of adviser remuneration, investment charges and any other costs.

5. What does your ongoing service include?

Establish how frequently reviews take place and what is included in the ongoing service.

6. What happens during a significant market downturn?

Ask how they communicate during difficult markets and how they help clients avoid emotionally driven decisions.

7. Why are you recommending this particular solution?

You should receive a clear explanation of why the recommended ARF and investment strategy are appropriate for you.

8. What alternatives have you considered?

Understanding the alternatives considered can help you understand the basis for the recommendation.

9. How will my strategy adapt if my circumstances change?

Your retirement strategy should be capable of evolving as your income requirements, priorities and circumstances change.

10. What value will you provide beyond arranging my ARF?

This may be the most revealing question of all.

The answer should explain how the adviser will help you make better financial decisions throughout retirement rather than simply establish an investment arrangement.

Common Mistakes When Choosing an ARF Adviser

Choosing an Adviser Based Only on Investment Performance

Past performance can provide useful information, but it should not be the sole reason for choosing an adviser or investment strategy.

A portfolio that performed strongly during one period may not be appropriate for your circumstances.

Consider the complete strategy, including your income requirements, investment timeframe, attitude to risk, withdrawal needs and longer-term objectives.

The question is not:

“Which investment performed best?”

It is:

“Is this strategy appropriate for my retirement?”

Choosing the Cheapest Adviser Without Understanding Value

Cost matters, but the lowest-cost service may not provide the same level of advice or support as a more comprehensive relationship.

Consider whether the advice helps you:

• avoid costly mistakes;
• manage retirement risks;
• make informed decisions; and
• adapt your strategy as circumstances change.

The objective is not simply to minimise cost. It is to understand the total cost and the value received in return.

Choosing an Adviser Who Talks About Products Before Understanding You

A good adviser should first understand your circumstances and objectives.

They should want to understand your:

• retirement income requirements;
• other assets and sources of income;
• attitude to investment risk;
• family circumstances; and
• longer-term objectives.

Only then should the discussion move towards specific solutions.

The product should fit your objectives. Your objectives should never be forced to fit a product.

Not Understanding the Total Cost

An ARF can involve several layers of cost, including investment charges, fund costs, adviser remuneration and administration or platform charges, where applicable.

Ask for the total cost to be explained clearly before proceeding.

You should understand both what the investment costs and what the advice costs.

Not Asking What Happens During Difficult Markets

Every investment portfolio will experience periods of uncertainty.

Ask how the investment strategy is designed to deal with market falls and how communication will work when markets become difficult.

The value of an adviser can be particularly apparent when making the wrong decision feels like the easiest option.

Treating Retirement Planning as a One-Time Decision

Perhaps the biggest mistake is believing that choosing an ARF is the end of the planning process.

Your circumstances and priorities may change.

Your income requirements may change.

Markets will change.

Tax rules may change.

Your strategy should therefore be capable of evolving with you.

Why Ongoing Advice Matters

When an ARF is established, important decisions have already been made about investment strategy, risk, income and the structure of your retirement plan.

But those decisions should not necessarily be regarded as permanent.

A meaningful retirement review should ask:

• Is my current income still appropriate?
• Is my investment strategy still aligned with my objectives?
• Has my capacity for investment risk changed?
• Are my charges still reasonable?
• Have my personal circumstances changed?
• Are there opportunities to improve my overall financial position?

The purpose of a review is not to make changes for the sake of making changes.

It is to make sure your strategy continues to reflect your circumstances and objectives.

The Adviser’s Role During Market Uncertainty

One of the most valuable roles an adviser can provide is perspective.

Market volatility is normal, but experiencing a significant fall in the value of your retirement savings can be unsettling — particularly when those savings are also providing your income.

During difficult periods, an experienced adviser can help by:

• explaining what is happening;
• reviewing whether the original strategy remains appropriate;
• putting short-term market movements into perspective;
• helping you avoid decisions driven by emotion; and
• keeping the focus on your long-term objectives.

Sometimes the greatest value of advice is not a decision that is made.

It is a poor decision that is avoided.

Retirement Advice Should Adapt as You Age

Your retirement strategy may need to evolve over time.

Someone who has just retired may have a very different timeframe, income requirement and attitude towards risk from someone who has been retired for twenty years.

As circumstances change, the balance between growth, income and security may need to be reconsidered.

The objective is not to create a plan that works only on the day you retire.

It is to create a strategy that can adapt through the different stages of retirement.

Choosing Your ARF Adviser

Choosing an ARF adviser is about more than finding someone who can establish an Approved Retirement Fund.

The investment solution matters.

The provider matters.

The charges matter.

But so does the quality of the advice and the decisions made throughout retirement.

A strong adviser should be able to demonstrate:

• relevant retirement planning experience;
• a clear investment philosophy;
• transparent remuneration and costs;
• access to appropriate investment solutions;
• a considered approach to retirement income;
• an understanding of retirement-specific risks;
• meaningful ongoing advice; and
• clear communication.

Most importantly, you should understand not only what is being recommended, but why.

The Real Value of Financial Advice

At One Quote Financial Brokers, we believe the real value of financial advice is not simply found in investment selection.

It is found in helping clients make better financial decisions.

That means explaining recommendations clearly, making costs transparent, understanding what matters most to each client and providing guidance as circumstances change.

Retirement planning is not about making one perfect decision when you retire.

It is about making a series of good decisions over time.

Considering Your ARF Options?

Choosing an ARF adviser is an important decision, and the first step is understanding your options.

At One Quote Financial Brokers, we provide retirement planning advice to help clients make informed decisions about their retirement savings, investment strategy and longer-term financial objectives.

Whether you are approaching retirement, considering transferring pension benefits into an ARF or reviewing an existing retirement arrangement, we can help you understand the options available and the factors that matter most.

An initial conversation does not commit you to any particular course of action. It gives you an opportunity to understand your options and decide what approach is right for you.

Arrange an initial ARF retirement consultation to discuss your options and take the first step towards making better financial decisions in retirement.