# Financial advisors don't advise...



## kevvo (6 May 2013)

Just got shonky advise from yet another "Financial Advisor" that proved to be horrible....had to stop and ask myself why am I taking advise from a guy that drove a Honda to work?! seems to me they are more concerned with sounding smart then actually being it! Heck, I could give uninformed advise and get paid for it too but I wouldn't do that to people...anyways, that's my rant for the day, thx for listening/reading..feel free to add


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## Boggo (6 May 2013)

*Re: financial advisors dont advise...*



kevvo said:


> ...had to stop and ask myself why am I taking *advise* from a guy that drove a *Honda* to work?!




Does he also provide advice and what is the relevance of driving a Honda


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## Klogg (6 May 2013)

*Re: financial advisors dont advise...*



kevvo said:


> Just got shonky advise from yet another "Financial Advisor" that proved to be horrible....had to stop and ask myself why am I taking advise from a guy that drove a Honda to work?! seems to me they are more concerned with sounding smart then actually being it! Heck, I could give uninformed advise and get paid for it too but I wouldn't do that to people...anyways, that's my rant for the day, thx for listening/reading..feel free to add




Maybe he takes a Honda to work because it's cost effective?

The idea that only people who own nice cars or fancy houses are financially intelligent is way off... Chances are the guy next door with the average car and house is in a better financial situation than the guy who's swimming in a million dollar mortgage so he can own a nice house.


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## burglar (6 May 2013)

*Re: Financial advisors dont advise...*



kevvo said:


> Just got shonky advise ...




Hi kevvo,
Welcome to ASF.

You're here to learn, so that you won't need his advice!
Buckle up!


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## Vixs (6 May 2013)

*Re: Financial advisors dont advise...*

Hey kevvo, your measure of someone's car as being relevant to their financial acumen is not particularly helpful, but it's not too late to be far more useful than your adviser!

Can I ask a few questions?
1 Why did you choose them?
2 What qualifications do they hold?
3 What experience do they have in the industry?
4 Were they a bank-aligned adviser or were from a non-aligned dealer group?
5 What advice did they provide that was crap, and what led you to the conclusion that it was crap?

By giving us some info on what went wrong you can help people that might end up with similar duds.

There are some worthless duds in this industry but not everyone is on their level.


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## Lone Wolf (6 May 2013)

Many people have been sucked in by fancy offices and an impression of wealth. Just because they make good money selling advice doesn't mean the advice is worth listening to. Just because someone has nice things doesn't mean they have any real wealth either for that matter.

They aren't all bad, but be very wary of the financial product salesman masquerading as a financial adviser.


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## Junior (7 May 2013)

As in every profession there are great ones and total duds, and everything in between.  Please provide details!

Also the car thing isn't true.  An expensive car may just mean a great salesman or a bloke with a big ego and too much debt.


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## kevvo (7 May 2013)

The "Honda comment" was simply saying that I don't know why I am taking advise on improving my financial situation from an individual who isn't exactly a shining beacon of financial success! Perhaps he is trying to be cost effective or conservative but i'll tell ya now, Im dubious.

He is well qualified but the hitch is that he is in with the banks and therefore pushes products and investments on the "approved List" which really just means he gets a commission for putting clients in that direction...in either event thankyou for welcoming me, I am here to learn, and look forward to speaking with you all!


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## Boggo (7 May 2013)

Junior said:


> Also the car thing isn't true.  An expensive car may just mean a great salesman or a bloke with a big ego and too much debt.




Does more often than not.




kevvo said:


> The "Honda comment" was simply saying that I don't know why I am taking advise on improving my financial situation from an individual who isn't exactly a shining beacon of financial success!




I still don't get what you are on about 
Ingvar Kamprad is worth $15 Billion and drives a 15 year old Volvo.


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## Farang (7 May 2013)

kevvo said:


> Just got shonky advise from yet another "Financial Advisor" that proved to be horrible....




What was the advice exactly?


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## kevvo (8 May 2013)

Boggo said:


> Does more often than not.
> 
> 
> 
> ...




Yea ok but how common is that? how many Billionaires out there are doing that vs the number of billionaires travelling in Bentleys and private jets, don't tell me bout the exception to the rule tell me bout the majority or at least the average


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## kevvo (8 May 2013)

Lone Wolf said:


> Many people have been sucked in by fancy offices and an impression of wealth. Just because they make good money selling advice doesn't mean the advice is worth listening to. Just because someone has nice things doesn't mean they have any real wealth either for that matter.
> 
> They aren't all bad, but be very wary of the financial product salesman masquerading as a financial adviser.




couldn't agree with you anymore!


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## Vixs (8 May 2013)

*Re: Financial advisors dont advise...*



Vixs said:


> Hey kevvo, your measure of someone's car as being relevant to their financial acumen is not particularly helpful, but it's not too late to be far more useful than your adviser!
> 
> Can I ask a few questions?
> 1 Why did you choose them?
> ...




Just quoting myself mate. 

Without any explanation your thread just says "Plumbers are crap because I called a plumber and he did a crap job."


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## sammy84 (8 May 2013)

It seems that there are a few people on this forum driving Hondas...

A car is a sign of wealth. There may be exception to the rule, but generally people with good cars have wealth and/or a good earning capacity. Pretty simple.

If I was getting financial advice from someone, I would prefer to get advice from someone who 'appears' to have wealth.


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## McLovin (8 May 2013)

sammy84 said:


> A car is a sign of wealth. There may be exception to the rule, but generally people with good cars have wealth and/or a good earning capacity. Pretty simple.




I think it's neither here nor there what car someone drives. Cars are so expensive in Australia. Why anyone would pay 2-3x what the same car costs in the US or Europe is beyond me. When I lived in London I had an M3. I bought it new. It cost GBP45k. I'd have to be a real idiot to pay $170k+ for the same car in Australia.

But in the eyes of some, that would make me a financial whizzzzzz.

Case in point:



> Porsche's iconic 911 sports car starts here at $223,000. In Japan, its price tag converts to $134,000. Britain, $107,000. The US, ''just'' $77,200 - cheaper than HSV's Commodore-based GTS.


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## Julia (8 May 2013)

McLovin said:


> I think it's neither here nor there what car someone drives. Cars are so expensive in Australia. Why anyone would pay 2-3x what the same car costs in the US or Europe is beyond me. When I lived in London I had an M3. I bought it new. It cost GBP45k. I'd have to be a real idiot to pay $170k+ for the same car in Australia.
> 
> But in the eyes of some, that would make me a financial whizzzzzz.
> 
> Case in point:



+1.  A car is a rapidly depreciating asset.  Why would you want to put more into it than you need in a practical sense?  I have a six year old very ordinary Astra wagon, perfect for the approx 1000kms I do p.a. and for my German Shepherd securely contained in the tail, cargo barrier preventing dog hair from covering the whole car?

Why would I want an additional $60K or $70 depreciating in a vehicle that just goes to the supermarket (where it's likely to get scratched in the car park) or a beach out of walking distance?

Good on the financial adviser who has probably chosen to invest his available capital in appreciating assets.

Anyone concluding that superficial trappings of wealth represent the reality is not understanding the basic principles of wealth creation.  

The FA that you want to see driving a fancy car could very easily be leasing it.  
And maybe renting his residence.


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## kevvo (8 May 2013)

McLovin said:


> I think it's neither here nor there what car someone drives. Cars are so expensive in Australia. Why anyone would pay 2-3x what the same car costs in the US or Europe is beyond me. When I lived in London I had an M3. I bought it new. It cost GBP45k. I'd have to be a real idiot to pay $170k+ for the same car in Australia.
> 
> But in the eyes of some, that would make me a financial whizzzzzz.
> 
> Case in point:




if you can afford it no worries does it make it a bad buy to purchase something you want? or is it better to not buy something you want because its available cheaper somewhere out there....if your making money it doesn't matter, youll purchase what you want not what you can...case and point being, id rather the advise from someone who can afford to do that than someone who cant....if you could afford it, youd pay 170k for exactly what you want, and so would I


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## waimate01 (8 May 2013)

sammy84 said:


> A car is a sign of wealth. There may be exception to the rule, but generally people with good cars have wealth and/or a good earning capacity. Pretty simple.




A car is not a sign of wealth - it's a sign of _priorities_.

It's like some guy wearing a $12000 watch. Some might notice and think it indicates wealth. To me, it indicates that at one point in this guys life, he had $12000 and couldn't think of anything better to do with it than spend it on a watch.

I know several very wealthy people ($50m+) who 'drive' very modest cars. I put the word 'drive' in inverted commas because more often than not, they're not the one driving.

I really encourage you to think more deeply about this. A flashy car *can* indicate a fondness for nice cars and a capacity to afford them, but more frequently it indicates a desire to impress, usually borne of insubstantiality. It's more likely to be accompanied by debt rather than wealth. 

It's important to resist falling for it for two reasons: a) its intention is to create an inaccurate impression, but even worse b) it can instill in people the notion that everyone else has a fancy car and an expensive watch, and impel them to abandon an otherwise sensible approach to finances and instead go borrow a bunch of money just to enhance their prestige.


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## Vixs (8 May 2013)

kevvo said:


> if you can afford it no worries does it make it a bad buy to purchase something you want? or is it better to not buy something you want because its available cheaper somewhere out there....if your making money it doesn't matter, youll purchase what you want not what you can...case and point being, id rather the advise from someone who can afford to do that than someone who cant....if you could afford it, youd pay 170k for exactly what you want, and so would I




You can't answer questions, care more about the appearance of wealth vs the having of wealth, and you don't understand the value of an investment or opportunity cost.

Sounds like your previous financial adviser(s) dodged a bullet - I wouldn't have you as a client.

Mods is there any reason a thread with no content should stay open?


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## Joe Blow (8 May 2013)

Kevvo,

Discussing what car your financial adviser drives, while of interest to some, is not exactly moving this thread forward.

Perhaps you could elaborate a little further? Some of the relevant questions posed by others have gone unanswered. Please consider addressing some or all of them to get this thread back on track.



Vixs said:


> Hey kevvo, your measure of someone's car as being relevant to their financial acumen is not particularly helpful, but it's not too late to be far more useful than your adviser!
> 
> Can I ask a few questions?
> 1 Why did you choose them?
> ...






Farang said:


> What was the advice exactly?


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## kevvo (8 May 2013)

Julia said:


> +1.  A car is a rapidly depreciating asset.  Why would you want to put more into it than you need in a practical sense?  I have a six year old very ordinary Astra wagon, perfect for the approx 1000kms I do p.a. and for my German Shepherd securely contained in the tail, cargo barrier preventing dog hair from covering the whole car?
> 
> Why would I want an additional $60K or $70 depreciating in a vehicle that just goes to the supermarket (where it's likely to get scratched in the car park) or a beach out of walking distance?
> 
> ...




Fair call Julia, definitely a possibility....I never would have thought the car comment would have taken over the thread as it has lol. That's Awesome!


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## Junior (8 May 2013)

waimate01 said:


> A car is not a sign of wealth - it's a sign of _priorities_.




Good post, I can relate to this.  I could be in Melbourne on a good salary accumulating wealth and driving a sweet car with a $60,000 lease.  I decided to travel the world and earn f***-all instead.  Clearly there's many out there who will judge me as being financially inept because of my priorities!!

OP, please give some info re the advice, I'm intrigued now!!!  Allow me to guess at least:

- Rollover your super into my preferred fund (with no sound basis for advice other than 'more investment options', 'tailer your portfolio so that it's aligned with your tolerance to risk')

- Purchase $1mill Life & TPD, premium Income Protection policy, $300k Trauma (upfront commissions...mmmmm)

- SOA preparation fee $1,000

- Implementation fee $1,000


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## McLovin (8 May 2013)

Julia said:


> Anyone concluding that superficial trappings of wealth represent the reality is not understanding the basic principles of wealth creation.
> 
> The FA that you want to see driving a fancy car could very easily be leasing it.
> And maybe renting his residence.




Even worse is making the assumption that someone has achieved their wealth by acting in the best interests of their clients.

A great salesman is not necessarily beneficial to your own finances. Or put it another way, are the advisers returns maximised when his/her clients are? I think not!


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## Vixs (8 May 2013)

Junior said:


> Good post, I can relate to this.  I could be in Melbourne on a good salary accumulating wealth and driving a sweet car with a $60,000 lease.  I decided to travel the world and earn f***-all instead.  Clearly there's many out there who will judge me as being financially inept because of my priorities!!
> 
> OP, please give some info re the advice, I'm intrigued now!!!  Allow me to guess at least:
> 
> ...




Yep, I'd say that's a pretty typical snapshot of what advice for Jack and Jill Average looks like. Get insured, sort your superannuation out and maybe help pay for your insurance with it.

It doesn't cost much more to get yourself a plan that covers property purchases, savings plans, an investment portfolio for the kids or the grandkids futures, margin lending, investment lending or retirement planning. These things aren't always relevant - some people really would just be better off by starting off with the basics - get yourself insured, and sort your super out!

The problem is that documenting a simple plan in an SoA costs more than creating it.

On the note of upfront commissions: I've never seen anyone in my workplace write a level commission policy because very rarely do peoples lives look the same in 4 or 5 years as they do on the day you write the policy. Debt levels are often much higher, income increased much more than inflation on the IP policy, the cost of medical treatment as well as increased debt levels and more dependents renders old trauma cover inadequate etc etc. You go to compare the policy to newer policies and find out that for a similar price you can not get extra features. Insurance policies are just products too - they change features and price points as they try to one up competitors.

Air con and power windows used to be luxuries in a car - now a car without sat nav and parking sensors is skimping on features.


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## Ves (8 May 2013)

Did it look like this?


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## sammy84 (8 May 2013)

Sorry Joe to harp on about the car, but this point frustrates me.

It is tall poppy syndrome at its finest. We dislike people who buy expensive cars because it's a waste of money and something most of us don't feel comfortable about spending/wasting money on.

*The point isn't whether it is a good investment*

To buy an expensive car you either need wealth or good earning capacity. Simple. A range rover, for example, on a 3 year lease will still cost approx $5k per month. If someone can spend this just on a car this indicates to me they have good earning capacity. 

There will be some isolated examples where a person manages to spend their entire wealth or monthly income on a car. As a whole, however, I think it's a safe criteria to test if someone is successful. The test doesn't work the other way - It doesn't mean that people with bad cars aren't wealthy, there would be plenty of people with cheap cars who are wealthy.


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## Vixs (8 May 2013)

Ves said:


> View attachment 52079
> 
> 
> Did it look like this?




Doubt it, rego, insurance, fuel consumption, tyres and maintenance would make a cost conscious adviser weep 

...on the other hand, a few laps at the track and you'd forget all about your week!


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## McLovin (8 May 2013)

sammy84]It is tall poppy syndrome at its finest. We dislike people who buy expensive cars because it's a waste of money and something most of us don't feel comfortable about spending/wasting money on.[/QUOTE]

I don't think it's tall poppy syndrome said:


> To buy an expensive car you either need wealth or good earning capacity. Simple. A range rover, for example, on a 3 year lease will still cost approx $5k per month. If someone can spend this just on a car this indicates to me they have good earning capacity.




It's still irrelevant. I can find you lots of conmen who drive nice cars too. And with those fat commissions, fa's who steered their clients into Storm I'm sure could also afford the monthly payments on a Range Rover. A financial adviser is not necessarily incentivised to maximise your returns. In the same way a broker makes his money by churning your account with endless buy/sell "recommendation".

That's why the whole car thing is a pointless exercise. Perhaps it confirms they can make money, it says nothing of whether they can make you money.


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## Vixs (8 May 2013)

I don't think luxury cars are a waste of money - you're absolutely right, everything is relative and given enough income a luxury car is not a terrible decision. You'd still be paying a lump sum or borrowing non-deductible debt that has an opportunity cost of the same dollars worth of growth assets, but if you have enough wealth then why not?

Anyone that uses that as a measure of someones ability likely does so because they lack the knowledge to make a useful or meaningful evaluation of someone's ability. In a business where your hardest task is often articulating the value of what you do to people that don't understand why it's important, if they rate you on your car what are the odds they can understand the concept that losing 2% when everyone else loses 4% is actually a good outcome? Not good imo.


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## village idiot (9 May 2013)

> if you could afford it, youd pay 170k for exactly what you want, and so would I




depends what you mean by 'afford it'. If you mean get to the stage where 170k is an irrelvance to you , for sure, when you're worth 10m. If you mean have >= 170k in the bank right now , you could buy it but might not be very sensible. If you mean earns some amount greater than the monthly repayments, some would some wouldnt, some mistake that for being able to 'afford it '.  


Originally Posted by Julia



> And maybe renting his residence.




eh, what does a blokes housing status got to do with it now? Are we now to expand the theme by linking renting with owing a boring car with financial incompetence ?

I rent a house and only have a car worth 18k so according to this thread I must be a financial muppet. oops.    ......  or I maybe I really am just the village idiot


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## Garpal Gumnut (9 May 2013)

I believe Financial Advisers are essential for the brain dead without internet skills and the ability to do 101 courses on money management free online via google.

Many financial advisers are good for this type of investor.

History though is replete with the muppets of financial advice capable of destroying investor wealth.

Storm Financial is a good example.

So I would agree that Financial Advisers have a place.

The problem is finding a good one, one who is skilled, ethical and capable.

it is impossible to assess from the Financial Advice industry, which are good and which are bad.

ASIC is a useless determining body, applying insignificant penalties to crooks, incompetents and low IQ Financial Advisers, post hoc.

It is a matter of buyer beware.

One has a better chance of finding a good barber than one has of finding a good financial adviser.

And a bad haircut only costs $20 from the former.

gg


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## Julia (9 May 2013)

village idiot said:


> eh, what does a blokes housing status got to do with it now? Are we now to expand the theme by linking renting with owing a boring car with financial incompetence ?



Sigh.   Just suggesting equating superficial observations with any conclusions about a person's financial competence or otherwise is not valid.

I'm not interested in whether anyone rents cars, houses or anything else.  What matters is that they have made a considered decision that their choice represents the optimal use of available funds.
Not everyone wants to own a house.  Plenty of examples have been put forward to show it's financially more rewarding to rent.  Others will find value other than just the financial aspect in owning their own home.

My point was re the house potentially being rented that (if the example of the Honda Civic was any guide) the OP would seem to conclude if his FA was living in an opulent residence, then ergo this would be proof of his financial acumen.
Just trying to say it ain't necessarily so.

OK, then?  Any other sensitivities I should address?


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## Garpal Gumnut (9 May 2013)

Julia said:


> Sigh.   Just suggesting equating superficial observations with any conclusions about a person's financial competence or otherwise is not valid.
> 
> I'm not interested in whether anyone rents cars, houses or anything else.  What matters is that they have made a considered decision that their choice represents the optimal use of available funds.
> Not everyone wants to own a house.  Plenty of examples have been put forward to show it's financially more rewarding to rent.  Others will find value other than just the financial aspect in owning their own home.
> ...




Agree Julia.

It is a circular argument.

The rich or poor never drive cars indicating their wealth.

i would distrust a financial adviser whether he had a Honda Civic or in the case of Manny and Julia Cassimatis, a private jet.

May we return to the *advice *, rather than the mode of transport. 

gg


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## jmoz (10 May 2013)

I’ve bitten my tongue (or fingers or whatever!) reading the various adviser bashing threads on here, and just wanted to add my 2c speaking as a BANK adviser.

There are plenty of **** advisers out there who will use anything as reasonable basis to get a client into their products. This is not just limited to bank FA’s. Best interest duty will go a long way to stop this.
Not all bank advisers have to use their own financial products only. I work for a second tier bank that is owned by one of the big 4, and my APL includes OnePath, Asteron, MLC, Comminsure, AMP, Colonial First State and Asgard. As well as this I am able to provide advice on and recommend changes to any existing super funds that the client has, including industry funds.  

Just because you guys don’t need advice, doesn’t mean no one does. Yes there are limitations and I’m sure that everyone here would be able to outperform all of my client’s portfolio of managed funds. However, this forum is in no way representative of the general population. 

Please remember that the majority of people are scared ****less of financial matters, and yet they are forced to be involved due to the superannuation system. Most people’s only investment assets are their super (I don’t count 80% of the ‘investment’ properties I see as I struggle to see how anything with an LVR of >90% can be called as such. If you want to have a go at banks, that’s what you should be focusing on).

I can help people gain a little bit of understanding as to where they are going to be in retirement and how they are going to pay the bills, save them a few thousand bucks a year in fees and tax, make sure they have protection in place so that they don’t leave their families SCREWED if they died, and turn a profit for our business in the process. Why should I be vilified for that?


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## Julia (10 May 2013)

You make some really valid points, especially that those of us who are critical of some advisers are not representative of the greater population.

One thing I've never been able to understand is how otherwise intelligent, well educated people, successful and diligent in their own field, just abrogate the responsibility of taking care of their financial well being.

Apologies to you for quite wrongly maligning your efforts.


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## Junior (10 May 2013)

jmoz said:


> I’ve bitten my tongue (or fingers or whatever!) reading the various adviser bashing threads on here, and just wanted to add my 2c speaking as a BANK adviser.
> 
> There are plenty of **** advisers out there who will use anything as reasonable basis to get a client into their products. This is not just limited to bank FA’s. Best interest duty will go a long way to stop this.
> Not all bank advisers have to use their own financial products only. I work for a second tier bank that is owned by one of the big 4, and my APL includes OnePath, Asteron, MLC, Comminsure, AMP, Colonial First State and Asgard. As well as this I am able to provide advice on and recommend changes to any existing super funds that the client has, including industry funds.
> ...




Good post, all valid points and highlight how some financial planners legitimately improve their clients' financial position.

I'm in the industry myself and know a few great planners.  It's just frustrating how many poor/average ones give the industry a bad name.

Julia, I agree with what you're saying, but the fact is a large proportion of the population won't or can't manage their financial situation effectively.  

Everyone is different, and possess different skill sets.  For example, do you remember some of the kids in high school, and their total inability to understand basic maths?  If you can't grasp basic maths...putting together a retirement plan or comparing superannuation providers is totally unachievable.  

An ethical and well qualified financial planner can have a positive impact for some of those out there who can't work these things out for themselves.


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## Julia (10 May 2013)

jmoz said:


> I’ve bitten my tongue (or fingers or whatever!) reading the various adviser bashing threads on here, and just wanted to add my 2c speaking as a BANK adviser.




jmoz, just wondering what your response would be (seeing you haven't made one on the thread) to Tech/A's questions here:
https://www.aussiestockforums.com/forums/showthread.php?t=26732&p=771191#post771191

Is that list asking too much of a financial adviser in your opinion?  Are they questions to which someone approaching their bank's FA could reasonably expect answers?

(No obligation to respond, of course.)


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## Dowdy (11 May 2013)

kevvo said:


> couldn't agree with you anymore!






sammy84 said:


> It seems that there are a few people on this forum driving Hondas...
> 
> A car is a sign of wealth. There may be exception to the rule, but generally people with good cars have wealth and/or a good earning capacity. Pretty simple.
> 
> If I was getting financial advice from someone, I would prefer to get advice from someone who 'appears' to have wealth.





If my financial advisor drove around in a 100k BMW, I wouldn't trust him with my money. 
Buying a new car is one of the worst financial decisions you can make! 

In other words - you want someone who leads by example....


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## jmoz (11 May 2013)

Dowdy said:


> If my financial advisor drove around in a 100k BMW, I wouldn't trust him with my money.
> Buying a new car is one of the worst financial decisions you can make!
> 
> In other words - you want someone who leads by example....




agree 100%, i believe that the chances of an asic ban increase exponentially with any adviser driving a car worth more than $100k!

julia, have added my thoughts on tech/a's thread, cheers


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