spice weasel (BAM)
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- Aug 18, 2005
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When i first started i the financial services industry i only had to prepare a ten page document outlining my advice.
Now that same advice by asic requirement is around the 50 page mark, no wonder people are having trouble understanding exactly whats going on.
ASIC have basically stated that people coming for advice have no clue and we can now be sued for the smallest things. Its like the guy who had auto pilot on his camper van so he went to make a cup of coffee and when he crashed he sued and won (not related to financial services, but you get my point everyone sues everyone these days). This is how stupid things are getting, and people are wondering why advice is getting expensive.
Getting a good financial planner is like getting a good mechanic, if you find one stick with them. From my personal perspective i am not only a financial planner, but also a tax agent, so i know both the apropriate financial stance to take and the tax consequences of anything we recommend, we are also an indpendent firm, meaning we recommend the best funds available, not just im with Commonwealth so i recommend commonwealth products etc. (and we get no commission from switching underlying investments)
The best thing you can do is have a basic understanding, i totally agree, with the financial planner assisting you to take advantage of the more complex (but totally legal) strategies.
I still think that if you took the advice of 50 financial planners and compared it to the advice of 50 people of the street, you are overall going to get better advice from the qualified professionals, just make sure you ask some questions when talking to a financial planner to get a feel for what they are like.
Basic guide for things to check for include:
EG - If you are writing a cheque out you should never make it out to the financial planner, but to the fund manager, or platform manager. That is a sign of a dodgy financial planner. (also make sure you have to sign something to withdraw your funds/change underlying investments - don't let them do it over the net without a signuature from you - this keeps you in the loop)
What level of reporting will you get. If you never recieve anything and don't have online access then how are you going to know what is going on with your money.
Make sure that for the money you spend you get some level of ongoing care. I am looking at the underlying funds for all our clients everday incase we need to make a switch of underlying investments. The financial planner should sign something to say what they are going to do for their money.
And most importantly, take an active interest in whats going on with your money. If you ask a question of your planner and the answer does not really help you to understand, don't stop asking till you have a full grasp of what is going on.
Those are just my tips. The financial planning industry has taken a really big hit in its credibility over the past 10 years and i can understand your criticism, all i say is that your odds of getting proper advice are much more likely with a financial planner than a person off the street and at least with a financial planner you have legal recourse if fraud/neglegence has taken place.
Now that same advice by asic requirement is around the 50 page mark, no wonder people are having trouble understanding exactly whats going on.
ASIC have basically stated that people coming for advice have no clue and we can now be sued for the smallest things. Its like the guy who had auto pilot on his camper van so he went to make a cup of coffee and when he crashed he sued and won (not related to financial services, but you get my point everyone sues everyone these days). This is how stupid things are getting, and people are wondering why advice is getting expensive.
Getting a good financial planner is like getting a good mechanic, if you find one stick with them. From my personal perspective i am not only a financial planner, but also a tax agent, so i know both the apropriate financial stance to take and the tax consequences of anything we recommend, we are also an indpendent firm, meaning we recommend the best funds available, not just im with Commonwealth so i recommend commonwealth products etc. (and we get no commission from switching underlying investments)
The best thing you can do is have a basic understanding, i totally agree, with the financial planner assisting you to take advantage of the more complex (but totally legal) strategies.
I still think that if you took the advice of 50 financial planners and compared it to the advice of 50 people of the street, you are overall going to get better advice from the qualified professionals, just make sure you ask some questions when talking to a financial planner to get a feel for what they are like.
Basic guide for things to check for include:
EG - If you are writing a cheque out you should never make it out to the financial planner, but to the fund manager, or platform manager. That is a sign of a dodgy financial planner. (also make sure you have to sign something to withdraw your funds/change underlying investments - don't let them do it over the net without a signuature from you - this keeps you in the loop)
What level of reporting will you get. If you never recieve anything and don't have online access then how are you going to know what is going on with your money.
Make sure that for the money you spend you get some level of ongoing care. I am looking at the underlying funds for all our clients everday incase we need to make a switch of underlying investments. The financial planner should sign something to say what they are going to do for their money.
And most importantly, take an active interest in whats going on with your money. If you ask a question of your planner and the answer does not really help you to understand, don't stop asking till you have a full grasp of what is going on.
Those are just my tips. The financial planning industry has taken a really big hit in its credibility over the past 10 years and i can understand your criticism, all i say is that your odds of getting proper advice are much more likely with a financial planner than a person off the street and at least with a financial planner you have legal recourse if fraud/neglegence has taken place.
