# Financial Planners



## Julia

The following extract from Crikey.com (beginning "The Westpoint saga.....") caught my eye.  The sad irony about those seeking financial planning advice is that often they are doing so because they are - as mentioned in the Crikey article - financially unsophisticated and therefore have no way of knowing how to evaluate the "advice" they are being given.

I can't think of any way round this but suppose the best protection would be to (a) go to someone who has been personally recommended by a trusted friend/colleague, or (b) interview several and form an opinion based on common suggestions by all of them, and then go with the person with whom you feel most comfortable.

And probably most of all, avoid anyone with an association with a parent company, or bank etc., and who is paid via commission.  Much better to pay a fee for service for independent advice.

If anyone else has some wisdom to offer on this question, I think it would be helpful to some of our newer members who are feeling a bit anxious about where to go to seek advice on setting up a SMSF etc.



Following is the quote from Crikey.
The Westpoint saga's latest twist raises some big questions concerning the way the Financial Planning Association (FPA) regulates its members' activities and how the financial services regulator (ASIC) fails to adequately protect the consumers it is meant to serve. ASIC now needs help from those of us who do know how the money business works and it might come as a surprise to some that it also needs protection from those in the money business who prefer it to be the toothless tiger that it is currently. I propose that ASIC have a board that consists of a mix of consumers, industry players and legal types who then bear some responsibility for making the necessary changes to a body that when it fails in its work, threatens to undermine confidence in the whole of the financial system. I for one would be prepared to put forward my 25 years experience in financial services as a resource. I'm sure some other like-minded, ethical and intelligent members of the financial services and legal community might do likewise, in order to promote genuine transparency and remove the stink that threatens to taint us all.

An accountant writes:
Re: Financial planners. As accountants the Government excluded us from providing financial advice, where beforehand we were able to provide general advice but not detailed specifics. As the accountant and tax agent for a client we were able to review and comment on a financial planners action plan, but the financial planners wanted us accountants cut out of this (they did a good job and the Govt agreed). The ASIC regulations are so tight now that we as the tax agents and accountants to the client – and having looked after their tax and accounts for many years – cannot comment. The financial planners are in fear of us affecting their "gravy train" of commissions. This is where the spin is and where ASIC and the Govt have got it wrong. The regulations favour the financial planners to protect their commissions, fearing we will advise the client of different products and therefore preclude their earn. BUT what if I read the plan and it is so obvious that the investments are not suitable, risky and pay big commissions? As the legislation stands I cannot give advice. Everyone has been focusing on "positive" advice (ie accountants suggest something else to the client and take the earn away from the financial planner), no one has thought, nor does the legislation allow us to provide the negative advice, and thus protect the client. This negative advice (to protect the client) is deemed to be "financial advice" as I see it and I have to keep my mouth shut for fear of being sued by the hungry financial planners.

Simon Drimer writes:
Re: Financial planners. Spot on Peter Mair (yesterday, item 3). Low-rent thieves in suits, most of them. Many people who visit financial planners are simply not financially sophisticated enough to make sensible judgements about the advice they are being given.


Julia


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## visual

Julia,
Unfortunately I`ve learned the hard way that when it comes to money you really cant trust anyone. Our accountant also a friend recommended a financial planner when we started on the road to looking out for our own future and that of our children, no matter of how many times we queried his advice, we relied on the accountant who kept on saying that what the financial planner was saying was right, after all the same person had sold him the same products and he was happy.
Of course he forgot to mention the financial gain he was making by keeping us customers of this wretched company and in the grasp of the financial planner. By the time we become sufficiently wise to take matters in our own hands the kids education or our aims for that had been trashed, our own future has been distrupted, and left me with an absolute contempt for anyone who offers advice and into information.


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## tech/a

My contempt for Financial Advisers is well known.

I have one rule.

*If I cant control my money * then I dont use it or invest it in whatever it is that I cant control no matter how good it's supposed to be.

That includes Brokers trust accounts. The only time my $$s go into a trust account is if I owe it to someone else.


*90%+ of Financial Advisors * are seeking Financial security themselves,if they havent achieved it,why on earth expect them to put you in a position they themselves are seeking????

One of my Finacial Advisor mates has a Porsche he's had 4 of them in the time I've known him.Wont buy anything else. Leases it of course (good business),but thats it----other than his family home heavily mortgaged in One of Adelaides Premier suburbs----illusion is not exclusive to magicians.
He once commented "Clients want to see the Porsche they expect it of Financial Advisors"

*What is lacking is Public education * there should be courses on RISK.

What it is
How to recognise it
How to quantify it.
How to negate or avoid it.

Peoples apathy "She'll be right mate" and lazyness are also issues that appear to cause stupid decisions.

Gullability and Greed however are things I have no idea how to overcome.


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## Duckman#72

Julia said:
			
		

> And probably most of all, avoid anyone with an association with a parent company, or bank etc., and who is paid via commission.  Much better to pay a fee for service for independent advice.
> 
> If anyone else has some wisdom to offer on this question, I think it would be helpful to some of our newer members who are feeling a bit anxious about where to go to seek advice on setting up a SMSF etc.
> 
> An accountant writes:
> Re: Financial planners. As accountants the Government excluded us from providing financial advice, where beforehand we were able to provide general advice but not detailed specifics.
> 
> Julia



Julia

The accountant is spot on. It is a bit rich for ASIC and the Government to start pointing the finger at Financial Planners and the way they do business when they originally set them up on this current system.

But I would say that generally those posting on ASF have a very cynical view of financial planners anyway. Particularly Tech. The view taken seems a very simplistic one. "I had a bad experience with a financial planner so they are all bad". That's crap. Would you suggest to the person who's previous sharemarket experience was Telstra 2 and Pasminco never to invest in the sharemarket again. Of course not.

Tech - it seems the basis for your argument is that "'I can do a better job than a financial planner - I want to be in control of my funds". That's great for you - and I bet you can get a better result, but it doesn't mean that someone else can't develop and implement a good wealth creation strategy through the use of a financial planner. 

I have no love of the financial planning industry. I hate the concept of trailing commissions and up front fees which may not have correlation with time spent on an investment plan. They swan around attending seminars for a lot of the year. BUT....it is irresponsible to be telling people all financial planners are rip off artists and they can do a better job themselves. Tech - the argument that if they were any good they wouldn't be working is very simplistic in my opinion. The world is full of examples where you could apply that rule. 

A tennis coach - if he was any good he'd be playing on the ATP tour. Won't go to him. A stock broker - if he was any good he'd be retired himself. Won't use him. 

Regards

Duckman


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## tech/a

> Tech - it seems the basis for your argument is that "'I can do a better job than a financial planner - I want to be in control of my funds". That's great for you - and I bet you can get a better result, but it doesn't mean that someone else can't develop and implement a good wealth creation strategy through the use of a financial planner.




Well no thats not my basis for argument.
My basis is that most financial planners are salesmen and wouldnt know a financial plan if they fell over it.Talk to them on any topic other than superanuation,succession stratagy,loss of income and life insurance,and you'll get either a complete blank stare,or what the hell would you know about wealth creation---*without one ounce * of meaningfull discussion on topics outside of their commissions table!!! All they have are opinions and as we know they are like armpits we all have them and many stink!



> I have no love of the financial planning industry. I hate the concept of trailing commissions and up front fees which may not have correlation with time spent on an investment plan.




Actually I love the concept from a reward concept,just ask Crazy John---his money didnt come from selling Mobiles! *Its use in the Financial industry is such that it breeds salesmen not financial planners!! * 



> They swan around attending seminars for a lot of the year.




They sure do and so would you if the company paid for it.



> BUT....it is irresponsible to be telling people all financial planners are rip off artists and they can do a better job themselves. Tech - the argument that if they were any good they wouldn't be working is very simplistic in my opinion. The world is full of examples where you could apply that rule.




Thats again is not my arguement and not what I'm advocating. 



> A tennis coach - if he was any good he'd be playing on the ATP tour. Won't go to him. A stock broker - if he was any good he'd be retired himself. Won't use him.




If I was having my kids taught how to hit a ball then most any "Tennis Coaches" would be sufficient. If I or one of the kids showed enough promise to win a few tournements then you can be any parent would be searching out a "More Qualified" Tennis Coach that could introduce aspects of playing the game well beyond that of hitting a tennis ball.

Financial Planners.If I'm/or anyone is going to invest my lifes savings its pretty dumb not to investigate fully the person your going to hand over 40-50 yrs of hard earned blood sweat and tears. *Its also irresponsible to give it ALL to anyone--Mother/Brother/Sister whoever*.
Due diligence must be taught and even when all possible precautions are taken still there are rare cases of catastrophic failure so see that in RED above.

*My suggested solution*.

Seek out and or take the opportunity to speak to people who you *KNOW* are highly successful in Wealth creation---even if you think what they do or have done is way way out of your league. One snippet could be worth 1000s when the time is right in your life to introduce.
One comment may stick in your mind and ring *ALARM* bells when someone who doesnt know better espouses a "truth" you are being asked to believe and worse place your money in/with.

If possible turn them into MENTORS,they have no agenda they dont want your $$s they have their own.How fantastic to be able to run anything concerning you past them!

I've just completed a project for a developer in Mt Gambier,a guy my age who loves fishing,his kids,his business and his clients.Throws a great BBQ which my staff enjoyed on friday nights,particularly the Lobster on the Barbie!! Hes a normal pretty rough around the edges JOE. But he is worth $60 mill.
*I've sat listened and questioned this guy for 4 hrs on 3 occasions---pieces of priceless information has come from him often. Information,Ideas and wisdom you simply wont and could never find from any financial advisor.*If anyone ever finds a good one,Id love to meet them as a good one with practical knowledge along with industry knowledge would be worth their weight in Gold Bullion.


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## TheAnalyst

What really surprises me with the Westpoint saga and the Financial Planners and especially from the FPA is the golden rule diversify and why werent the clients diversified??? I know why. Because the commissions were so good who would want the clients diversified??

The only question why accountants wont or are not allowed to do planning is simple?? All they have to do is 4 subjects via distant education and they can offer advice but the problem is a lot of accountants have trouble doing the courses as they can be very difficult.


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## Prospector

I think maybe TechA and Duckman are arguing about semantics really.

I agree Tech that a mentor is the most powerful way of learning from other's experiences.  The trouble is, where do you find them?  So therefore people go to Financial Planners who are supposed to be the experts.

Sadly we have had a bad experience with a Financial Planner, although we knew enough not to follow his advice.  Thank god we didnt see him when we were in our thirties when we were a bit more wide-eyed and trusting.  He wasnt just unhelpful - some of the things he was suggesting were plain wrong from a Tax perspective.  Visual - I am sad to hear that your experience had such a negative impact on your life.

Our accountant was also clear that he could not offer financial advice, however he would share gems with us that because of his upfront stance, we felt we could listen too!  He also listened to us, because we asked him about buying shares in one of Kerry Packer's ventures (cant think of the name now - just remembered - ECorp) and we did, at a few cents each.  The accountant bought some too because he thought we were on to a good thing.  They rose to $8 before crashing then being liquidated.  We sold at around $6, but the accountant hung on (we hadnt spoken for a while) until the bitter end.  When he did our books that year he was a tad peeved because we hadnt told him we were selling


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## pch

The only way to have a financial planner who work in your interest is fee for service and rebates *all* trails. Another good test of your FP is to ask them if they recommend index funds. If they say no, then do not use them...

A friend of mine is a fee for service FP and does this and he is relatively well known and generally loathed by his fellow financial planners. He has taught me a hell of a lot to the point now where I really don't need him for 90% of things (although I still seek his advice a lot). 

An old high school buddy of mine is also a FP and I asked him about my fee for service mate. His answer was that he was the 'Neil Jenman' of the FP industry and generally not liked.

But this high school buddy of mine is addicted to comissions and only went into FP because the mortgage broking business dried up as property lost favour..


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## crackaton

TheAnalyst said:
			
		

> What really surprises me with the Westpoint saga and the Financial Planners and especially from the FPA is the golden rule diversify and why werent the clients diversified??? I know why. Because the commissions were so good who would want the clients diversified??
> 
> The only question why accountants wont or are not allowed to do planning is simple?? All they have to do is 4 subjects via distant education and they can offer advice but the problem is a lot of accountants have trouble doing the courses as they can be very difficult.




Financial planners can do only one thing. Sell advice to clients. CPAs can run whole companies.


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## Julia

Interesting responses.  I agree essentially with Duckman in that a bad experience with a shonky operator shouldn't colour our views about the whole industry.

I've experienced the good and the bad.  When I first had some money to invest and was extremely naive, I was really impressed by the beautifully presented "financial plan" which was, whoop de do, given to me free of charge!  Did I think to ask how this expert was being paid?  No, too busy being happy with his promises of megabucks to come from the variety of managed funds he had recommended.  A year later, I'd learned the megabucks just didn't happen (partly because he had put the majority of the funds into overseas shares when they were declining big time while Oz shares were still doing quite well), and I'd had the unhappy realisation about trailing commissions.  Some investigations indicated that my supa dupa funds were those which paid the "adviser" the best trailing commission.

However, when I was thinking about setting up a SMSF I found a planner who had no interest in directing where I should invest, but who was able to make several really useful suggestions about how to structure my whole financial situation to the best advantage.

These days I pay a very small annual retainer to a licensed planner whom I trust for the necessary details to ensure I am complying with all the regulations attached to the running of a SMSF.  This includes her doing all the paperwork for, e.g., making a lumpsum withdrawal which requires preparation of EFT statement etc.  Money well spent imo so that I don't worry about that stuff.

Do agree about lack of basic education regarding investing and risk.
If I were a teacher, however, I'd be heaving a sigh of frustration at thinking of yet another subject to cover.  Suppose it could be outsourced.  People like Noel Whittaker or Daryl Dixon would probably be up for doing talks at high schools.

Julia


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## Odduna

Although the Westpoint saga is sad, i am fed up with these people chasing higher returns complaining when their investment fails, with or without advice.

Westpoint reminds me of Pyrmaid building society. People investing in a group cause they were getting a larger return. When it fails, blame everyone except themselves for their greed. 

Even a normal lay person should know that if a 'safe' term deposit with a bank is 5% and another group is offering 10%, surely you use common sense and think that something maybe different in the product??? 

Yes its a sad case, yes some individual planners probably did do the wrong thing, but in the end, these investors would have been looking at the possible returns and thought what the hell. 

PS i do not see accountant as a higher order than planners, you have your good ones and bad ones. But as stated with the post, yes a CPA can run the whole company, they can run it well or run it into the ground.

Just my opinion.


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## crackaton

Odduna said:
			
		

> Although the Westpoint saga is sad, i am fed up with these people chasing higher returns complaining when their investment fails, with or without advice.
> 
> Westpoint reminds me of Pyrmaid building society. People investing in a group cause they were getting a larger return. When it fails, blame everyone except themselves for their greed.
> 
> Even a normal lay person should know that if a 'safe' term deposit with a bank is 5% and another group is offering 10%, surely you use common sense and think that something maybe different in the product???
> 
> Yes its a sad case, yes some individual planners probably did do the wrong thing, but in the end, these investors would have been looking at the possible returns and thought what the hell.
> 
> PS i do not see accountant as a higher order than planners, you have your good ones and bad ones. But as stated with the post, yes a CPA can run the whole company, they can run it well or run it into the ground.
> 
> Just my opinion.




Very true. But generally CPA's are fairly knowledgable and have some degree of integrity. There are always exceptions!!


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## tech/a

CPA's Manage Money.

Good F/Ps should help your money create more money,without excessive risk.

Agree that people look for the best returns but cant agree that thats necessarily greed! Rip offs arent the fault of the investor,and not the fault of the F/P recommending them---both are after maximum return.

Wonder what service youd get from F/Ps if they had to guarentee your initial capital.'or have indemnity insurance which clients could claim against in cases like west.


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## Duckman#72

tech/a said:
			
		

> *My suggested solution*.
> 
> Seek out and or take the opportunity to speak to people who you *KNOW* are highly successful in Wealth creation---even if you think what they do or have done is way way out of your league. One snippet could be worth 1000s when the time is right in your life to introduce.
> One comment may stick in your mind and ring *ALARM* bells when someone who doesnt know better espouses a "truth" you are being asked to believe and worse place your money in/with.
> 
> If possible turn them into MENTORS,they have no agenda they dont want your $$s they have their own.How fantastic to be able to run anything concerning you past them!
> 
> I've just completed a project for a developer in Mt Gambier,a guy my age who loves fishing,his kids,his business and his clients.Throws a great BBQ which my staff enjoyed on friday nights,particularly the Lobster on the Barbie!! Hes a normal pretty rough around the edges JOE. But he is worth $60 mill.
> *I've sat listened and questioned this guy for 4 hrs on 3 occasions---pieces of priceless information has come from him often. Information,Ideas and wisdom you simply wont and could never find from any financial advisor.*If anyone ever finds a good one,Id love to meet them as a good one with practical knowledge along with industry knowledge would be worth their weight in Gold Bullion.




That's better Tech.


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## Duckman#72

Prospector said:
			
		

> He wasnt just unhelpful - some of the things he was suggesting were plain wrong from a Tax perspective.  Visual - I am sad to hear that your experience had such a negative impact on your life.
> 
> Our accountant was also clear that he could not offer financial advice, however he would share gems with us that because of his upfront stance, we felt we could listen too!




Hi Prospector

I agree - Tech and I are probably on the same page. 

It is very important that you work closely with your accountant/financial planner and solicitor(if needed). Looking for a "one stop shop" can lead to disaster.

As for your accountant. You are lovely clients as - sadly - under the current legislation he broke the law and you could sue. 

Duckman


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## Odysseus

There is a world of difference between a planner and an adviser. It should be possible to find a planner of some competence and integrity who can help one to do some strategic thinking, especially with regard to such a matter as to how to set up your own super fund. But ADVICE requires far more skill and knowledge than most of the so-called advisers have, independently even of the question of their integrity. Ultimately, in any case, if you invest in an adviser, that is a very  major investment by itself, and the results will  only be as good as that adviser. Most people who are really interested in investing in my experience do a lot better than the average adviser or broker: but you need to be prepared to LEARN, LEAR, LEARN. It's a matter of reading an awful lot, thinking an awful lot, trying out your own ideas, and finding out the hard way what does work to help you realise your goals and what doesn't. Start in a small and modest way, and work towards more skill as you go along. QUIT LOSSES as soon as a company shows it's in trouble, and before a bear period occurs, but BUY during corrections. Let profits run rather than selling too quickly. Concentrate on companies with sound earnings and good prospects, with not too much gearing. DON'T SET YOUR SIGHTS TOO HIGH. Good investments will perform better than a modest person thinks, but someone over-ambitious soon comes a cropper.


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## Julia

More confirmation on the role of financial planners:

--------------------------------------------------------------------------------
http://www.smh.com.au/articles/2006...4198138395.html

Julia


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## Realist

Asking a Financial advisor for information on what to do with your money is like asking a Real Estate Agent what house to buy, or a Recruitment Agent what job to take.

For those that do not get that, it is like asking a used car salesman what car to buy.

By all means ask them, but as Joe Blow always says - DO YOUR OWN RESEARCH!


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## money tree

Firstly, there are Financial PLANNERS employed by companies who market only their own financial products. A Planner needs no more knowledge than you or I in order to enter details into a spreadsheet. There is a major conflict of interest here, as the client is not recommended the best product available, but the best product that company offers (or the product giving the best commission).

Secondly, there are Financial ADVISORS employed by companies who market only their own financial products. These people at least have some sort of qualification and are experienced & knowledgeable enough to offer the right advice. Again, there is a conflict of interest because they are paid to market their own companies products.

Lastly, there are independant Financial ADVISORS. These people often have high qualifications, and are not restricted to offering only a few products. Here is where you will get the right advice. They often charge "fee for service" which means they dont get commission. This is the only way to guarantee the advice is unbiased.

Unfortunately, these Planners have given the whole industry a bad name. Then, people like Realist come along and offer their 2c when they dont have a clue what they are talking about. Its pure arrogance to believe you know as much as a qualified advisor. Unfortunately, these people have no idea how much they dont know. There will be some people here who really need advice but are put off seeking it because of the opinion of uneducated know-it-alls. 

As many of you know, I am a qualified advisor. Im quite certain I have made more money in the last year than 99% of people here. Im also quite certain that nobody else can match my percentage return. So just keep bagging out those "used car salesmen" and pretending you know as much as them. 

They say success is the best revenge.....how sweet it is


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## RodC

money tree said:
			
		

> Lastly, there are independant Financial ADVISORS. These people often have high qualifications, and are not restricted to offering only a few products. Here is where you will get the right advice. They often charge "fee for service" which means they dont get commission. This is the only way to guarantee the advice is unbiased.




Unfortunately these are the ones who have caused many of the problems over the years by appearing to be independent whilst really not always providing independent advice. Due often in part to inadequately disclosed trailing commissions.

Rod.


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## rub92me

money tree said:
			
		

> Unfortunately, these Planners have given the whole industry a bad name. Then, people like Realist come along and offer their 2c when they dont have a clue what they are talking about. Its pure arrogance to believe you know as much as a qualified advisor. Unfortunately, these people have no idea how much they dont know. There will be some people here who really need advice but are put off seeking it because of the opinion of uneducated know-it-alls.
> 
> As many of you know, I am a qualified advisor. Im quite certain I have made more money in the last year than 99% of people here. Im also quite certain that nobody else can match my percentage return. So just keep bagging out those "used car salesmen" and pretending you know as much as them.
> 
> They say success is the best revenge.....how sweet it is




Wasn't it about making money for other people rather than for yourself?


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## visual

rub92me said:
			
		

> Wasn't it about making money for other people rather than for yourself?





And there you have it,unfortunately by the time we realise that financial advisers are in it for themselves often  its too late,


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## grumpee boi

Firstly I am a financial planner so read my opinions in that light please.  My biggest concern with many of the statements on this topic is the lack of knowledge as to how financial planners can add value to a person's situation and how to find a good one.  The old planners of yesteryear must shoulder a lot of the blame but to imply that basically all financial planners only serve their self-interest is way off mark.

I used to work for AMP (which has just been handed an enforceable undertaking by ASIC for poor super switching advice) and was on a retainer with commission.  I made bugger all during my time there because I would not place my interests ahead of a clients.  This decision was reinforced with the type of clients that I saw - many middle income families that could not afford to be stiffed.  This attitude is increasing with the newer breed of advisors making their way through the ranks.  The problem is that everyone wants to paint planners with the same brush based on a negative experience or anecdotal evidence and hearsay.

As has been suggested fee for service is the best model to look for in a planners remuneration but this in itself does not ensure objective and relevant advice delivered with your best interests at heart.  It is easy to become a fee for service planner.  

Commissions do serve their purpose too.  In recent years ASIC has gone so overboard with compliance issues that comliance costs have increased manyfold.  They have almost effectively priced financial planning out of the reach of the people that need it the most (middle income Australia).  Offering those sorts of clients a commission option (while not optimal in terms of having all of your money working for you or 20-25% more expensive premiums) can be the only way to service lower income clients.  But any trailing commission should offset the review fee each year, bi-annually or whatever.

I digress.  The best financial planner is one that actually listens to you and asks so many questions that you think they are just a nosey parker.  Financial planning is not about wealth creation per se although that generally is a goal.  It is about finding out what your client wants the most out of life and providing the means to achieve that.  It is not about "I want $40k per year in retirement so get it for me".  It is about helping clients articulate what it is that makes them happy, determining the funding level necessary and designing a blueprint to maximise the probabilities of achieving as much of it as possible.  Creating wealth is often seen as the number one aim because people always seem to link wealth and happiness without giving due consideration to how the wealth will make them happy.  They may in fact be able to fund a lifestyle that makes them extremely happy with less dollars.  But if they never ponder the lifestyle then they may have extremely unrealistic expectations and be setting themselves up for failure from the start.  Most of what makes us happy does require financing anyway but a good financial planner will help you articulate to what degree.  Obviously I am speaking about comprehensive planning and not one-off incidental advice such as rolling over super, what to do with my mortgage, help me with some insurance and so on.

Here is another tip when seeking advice.  It is always best to have a planner do a strategy paper that outlines what course of action will be chosen and what alternatives were eliminated and the reason for this. It is not a full plan but an outline and should only cost a fraction of a plan.  that way you can determine for minimal cost and angst if they have your interests at heart and whether they have assessed your needs correctly.  The planner is also able to recoup some of the cost of their time and have a wonderful chance to impress upon the client how they can improve their situation.

The industry is changing but it will do so slowly.  From next year to become a CFP you will need to have an undergrad degree.  The standards will rise but just as in any profession there will always be bad apples.  The younger generation will strive to become more professional and raise planning from an industry to a profession.  There are many older planners that are trying to do so now - you just have to sort the wheat from the chaff at this point in time unfortunately.

But don't avoid advice because of a prior bad experience whether it is your own or anothers.  Just look harder because there is extreme value out there.

Adam


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## Happy

Financial planer has 2 choices look after him/her-self or look after client and that all to it.

Of course you can fluff it up and dress-up, but it is really that simple, and in my opinion most of financial planners look after themselves, suppose tough luck for clients.


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## visual

Happy I could`t agree more,most financial advisors sound like Adam.But behave as per your description of them.


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## Duckman#72

To be fair to financial planners - how much is a fair fee?

Professionals such as architects, engineers, accountants, lawyers, generally bill out on a time basis. However the difference is that you can see what these professionals "do" for their money (prepartion of financial statement, design of a home, day in court etc). It's not always easy to "see" what a financial planner does for you.

I'm not defending them but.......it is very hard to get your head around what they do for their fees.


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## visual

This what they do for their fees,they coral you into funds or products that gives them the best commissions.Thats all.


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## dmasvar

How so amusing and a good interesting post too.

I've also worked in the financial planning industry and would like to comment.

Firstly on the matter of what they do for you and the articulation that they are a bunch of sales people and that's about it, well you're partly right and partly wrong.  Because its an industry going through transition, you cannot compulsorily retire the ones in their 40's,50's and 60's just because you expect higher standards,it is after all Australia and we don't want to eliminate somebody's livelihood just cause the industry is moving on.

The industry is doing all the right thing, constantly envolving and there are young people pushing through the industry, give it 5 to 10 years and most of the old salesmen type would have retired hopefully.

Anyway, back to my point, most of the sales people that you see parading as financial advisors do have what they call paraplanners (which is what i had done for 5 years), now paraplanners are the true professionals who hide in a corner of those big buildings, learning and learning technical stuff,just like your H&R block ads.  They are the ones preparing the financial plans and so there is a high level of protection for consumers.  The knuffhead selling to you may be a knuffhead, but the plan he holds is written by an extremely well trained professional - they are 99% of the time under 30 or basically young.

I think this angle of the debate is losted. 

Another angle that is losted in the debate or not covered is that financial planning as eluded to earlier by some financial planners/advisors is that the industry is principled on several fronts.

1. financial planning, eg.ivnestment plan, ssavings plan, portfolio construction
2. insurance
3. estate planning
4. a litle bit of tax
5. superanuation consulting
6. retirement planning.

Now the bit that is missed by people is that wealth creation espoused by planners is not premised on most people's objectives on this forum which is quick buck,speculating and trading and a very little on investing.

Be reasonalbe,do your research and learn about investing.

I'm traditionally from a finance background,master level, start to read some research on day traders that is studied by PHD students, do a survey,how many people can beat a truly diversified portfolio over a 10 to 20 year period of time.

In essence, there will be many who have made specular gains, but for the majority of people ..and you will find for yourself if you fit the majority of people definition..because you can successfully and consistently manage to out perform a diversified portfolio for 5 years or more...than you need advice and would be better served with a diversified portfolio.

The other point, financial planning is not just about performance returns, that's a fund manager's role remember, and they do perform as well, if many of you wanted to find out more, try to look towards their returns, they do do 40% some years, i remember during the 90's some fund managers like Bt and First state providing for some 30% plus compounding returns for 10 year period.

Now remember as mentioned financial planning isn't just investment return, its about being strategic.

As well, one area that a lot of you won't ever understand is the complexity of the supernnuation rules, they are so complex you need to be trained, this is an enormous area and opportunity for value add, eg. self managed super fund has enormous amout of strategies,are you tell ing me all you traders are going to be able to uncover these,when planners must rely on qualified and highly experienced legal people to train them up on it, thereis enormous value add..you would be foolish to dismiss the industry

Again another area is retirement planning, are you saying you're going to ignore the tax planning based strategies that retirement planning is based around, the enormous complexity of Social Security Act, the Super Act, the Tax Act all intertwined to provide value added solutions..

Only a fool would dismiss financial planners...

Tech, your words of wisdom is all but a fool's talk, there are bad apples everywhere, there are more in financial planning as its a new industry evovling.. its not new as such as its based on the old insurance industry, but financial planning is a new industry because of the multi faceted role it plays.

Additionally, you don't need a degree to run a company successfully, you don't need a degree to be successfuly, only cautious people or lambs like the majority of the population who have no idea honestly seek the secure path and grab a degree..

Bill Gates never got a degree, and many others also...

But financial planning is specifici and is very technical, don't be confused by the salesman.

Also successful people that another person posted about who's worth $60m will still not know much about financial planning and the technical ness.. they can teach you broad skills, but if you survey rich people its a lot of risk taking and luck.. being in the right place at the right time,with the right people,at the right moment for the industry...

Don't confuse their success with their intelligence... 

And don't confuse intelligent people who are not rich as being not intelligent..


----------



## money tree

rub92me said:
			
		

> Wasn't it about making money for other people rather than for yourself?




I dont have clients, ie I didnt make stacks of money by being a dodgy advisor. I did it by applying my knowledge to my own investments to outperform.....



			
				visual said:
			
		

> And there you have it,unfortunately by the time we realise that financial advisers are in it for themselves often  its too late,




My point was that advisors are not (all) just clueless idiot rip-off merchants. Some of us actually know how to make money without ripping off mums & dads. My other point was that ignorant fools think they know everything about finance, when they dont have the first clue. When you dont know how much you dont know, its easy to think you are as smart as someone who does. 

The majority of people here would BENEFIT financially from seeing an advisor. It amuses me that people wont spend $250 to save themselves $2000....once again they dont know how much they could benefit, and dont think its a wise investment. 
Would you represent yourself in court or hire a lawyer? 
Would you fix your own wiring or call an electrician? 
Look at the most successful people in business. Do they try and do everything themselves or do they hire specialists?


----------



## Julia

grumpee boi said:
			
		

> Firstly I am a financial planner so read my opinions in that light please.  My biggest concern with many of the statements on this topic is the lack of knowledge as to how financial planners can add value to a person's situation and how to find a good one.  The old planners of yesteryear must shoulder a lot of the blame but to imply that basically all financial planners only serve their self-interest is way off mark.
> 
> I used to work for AMP (which has just been handed an enforceable undertaking by ASIC for poor super switching advice) and was on a retainer with commission.  I made bugger all during my time there because I would not place my interests ahead of a clients.  This decision was reinforced with the type of clients that I saw - many middle income families that could not afford to be stiffed.  This attitude is increasing with the newer breed of advisors making their way through the ranks.  The problem is that everyone wants to paint planners with the same brush based on a negative experience or anecdotal evidence and hearsay.
> 
> As has been suggested fee for service is the best model to look for in a planners remuneration but this in itself does not ensure objective and relevant advice delivered with your best interests at heart.  It is easy to become a fee for service planner.
> 
> Commissions do serve their purpose too.  In recent years ASIC has gone so overboard with compliance issues that comliance costs have increased manyfold.  They have almost effectively priced financial planning out of the reach of the people that need it the most (middle income Australia).  Offering those sorts of clients a commission option (while not optimal in terms of having all of your money working for you or 20-25% more expensive premiums) can be the only way to service lower income clients.  But any trailing commission should offset the review fee each year, bi-annually or whatever.
> 
> I digress.  The best financial planner is one that actually listens to you and asks so many questions that you think they are just a nosey parker.  Financial planning is not about wealth creation per se although that generally is a goal.  It is about finding out what your client wants the most out of life and providing the means to achieve that.  It is not about "I want $40k per year in retirement so get it for me".  It is about helping clients articulate what it is that makes them happy, determining the funding level necessary and designing a blueprint to maximise the probabilities of achieving as much of it as possible.  Creating wealth is often seen as the number one aim because people always seem to link wealth and happiness without giving due consideration to how the wealth will make them happy.  They may in fact be able to fund a lifestyle that makes them extremely happy with less dollars.  But if they never ponder the lifestyle then they may have extremely unrealistic expectations and be setting themselves up for failure from the start.  Most of what makes us happy does require financing anyway but a good financial planner will help you articulate to what degree.  Obviously I am speaking about comprehensive planning and not one-off incidental advice such as rolling over super, what to do with my mortgage, help me with some insurance and so on.
> 
> Here is another tip when seeking advice.  It is always best to have a planner do a strategy paper that outlines what course of action will be chosen and what alternatives were eliminated and the reason for this. It is not a full plan but an outline and should only cost a fraction of a plan.  that way you can determine for minimal cost and angst if they have your interests at heart and whether they have assessed your needs correctly.  The planner is also able to recoup some of the cost of their time and have a wonderful chance to impress upon the client how they can improve their situation.
> 
> The industry is changing but it will do so slowly.  From next year to become a CFP you will need to have an undergrad degree.  The standards will rise but just as in any profession there will always be bad apples.  The younger generation will strive to become more professional and raise planning from an industry to a profession.  There are many older planners that are trying to do so now - you just have to sort the wheat from the chaff at this point in time unfortunately.
> 
> But don't avoid advice because of a prior bad experience whether it is your own or anothers.  Just look harder because there is extreme value out there.
> 
> Adam




Adam:

An articulate post.

Could you address the question of licensing.  I think this is where many potential clients become confused.  ASIC advise that any business proposing to offer advice regarding financial planning, share selection, etc etc. should have an Australian Financial Services Licence.  When asked what criteria are applied towards the issuing of such a licence, they appear to be very vague and suggest it could be as little as a brief course at one's local TAFE!
(Well, if that's the case, no wonder so many people get into trouble accepting advice from "planners" and "advisers".)

Then we have the advertised term "Licensed Financial Planner" and "Member of the Financial Planning Association".  What is required before being able to use these credentials, what sort of study, examinations etc?

I think the general vagueness which surrounds the industry is the source of much of the distrust.

Look forward to your comments, and thanks.

Julia


----------



## Duckman#72

money tree said:
			
		

> I dont have clients, ie I didnt make stacks of money by being a dodgy advisor. I did it by applying my knowledge to my own investments to outperform.....




Hi Moneytree

Don't you sell your courses or are you fully reliant on your own independant investments these days?

Duckman


----------



## grumpee boi

Julia,

thanks for the kind comment.

Firstly, you have to have a license or be an authorised representative of a licensee.  Licensees are generally the bigger organisations like AMP, AXA, ING and the other insurance companies.  Then you have the banks like CBA, Macquarie and so on that also grant authorised representative status.  So you have the situation where most of Australia's planners (must be more than 17,000) are authorised by an insurance company or a bank.  For example did you know that Hillross is owned by AMP, ThreeSixty by MLC and on it goes - they are not all easily recognised but there are links to the insurance co.s and banks.

Secondly, you may be an individual AR or a corporate AR.  So I set my company up as a CAR under a boutique dealer group (dealer group basically equates to licensee).  Boutique basically means it is not owned by a bank or insurance company but by the directors.  So my company and myself are authorised reps and basically piggyback the conditions of the licensee.  Becoming a licensee is an expensive and drawn out process.  You have to prove relevant and adequate experience, document your training and compliance plans to ensure that all the reps you appoint will act correctly and in line with legislation (this is where AMP recently got caught out), prove financial ability and backing and so on.  The licensing fees are quite expensive and then there is PI insurance to cover the dealer group and reps.  So I choose to pay my dealer group a cut of my fees to have them worry about all of this stuff.  When and if my fees become so large that the cut I pay outweighs the cost and time burden of doing it myself then I might get my own license but I doubt it - it really appears a hassle and many big, successful businesses still operate under someone elses license.

The other thing to note with licenses is that there are different conditions that can be attached and then as licensee you are able to restrict your reps again.  For instance under my dealer groups license they are able to do everything but offer derivatives advice.  They chose not to take this on because of the huge increase in PI insurance as a consequence of doing so.  They have granted me the same advice conditions as on their license.  They could have restricted me to just offering risk insurance advice or risk plus retail investments and so on - the combinations are numerous.  This gives the AFSL holder the ability to maintain a degree of control.  

so those TAFE graduates that you talk about might fall under this category. It is easy to become a FP - you can do 4 courses externally through Tribeca in less than 6 months and bingo - financial planner as long as you can get authorised.  You may obtain a restricted rep status or you may get full rep status like I did at AMP (I held a business degree and an honours degree before I became a FP anyway and was amazed at how easy it was - open book exams too!!)

I would just like add that there are still many businesses and individuals that fall under the banks and insurance companies that I am sure have integrity and honesty and offer genuine advice.  The one good thing about the big groups is the access to support, administration and training that I would like more of.  But I like the ability to find a new product, approach the compliance officer and put forward my case for using it and then being allowed if he feels it is a sound product.  That is, basically no restrictions on what I can and cannot use.  And because I charge fees, I use many products that do not pay commission like Dimensional fund advisor funds and Vanguard.

Member of the FPA doesn't mean jack in my opinion.  They are a quasi-body, not even an industry group really.  You just have to pay an annual fee each year to have the privilege of putting the logo on your business card.  Many of those members were involved in the Westpoint saga and even this latest AMP saga.  The problem with the FPA is that many of the principal members are the banks and insurance co.s.  The conflict is that it is supposed to be a body that represents planners but the dealer groups sit in there trying to impact direction.  

I think that when in doubt just ask - honest people with nothing to hide will be happy to expound on anything.  You will see the shonksters squirming and answering like politicians - fluff.

Finally, people must remember that when you are paid for providing a service you are ultimately acting in your own interest - many professions do it.  The key point is - do you also act in the interests of your client (the payer) or solely in your own?


I hope that this clears things up.  
Cheers,
Adam


----------



## Julia

Thanks for the explanation, Adam.  Not sure that it makes me feel any better though.  It seems many in this industry have minimal experience and are much less qualified than you appear to be.

Julia


----------



## ggmaximus

Money Tree,

What sort of returns have you been Generating? 
and is that amount your return or clients?

Cheers.


----------



## money tree

https://www.aussiestockforums.com/forums/showthread.php?t=3395&page=3

as I already said 

I DONT HAVE CLIENTS


----------



## Julia

Interesting comments from a financial planner in training.

http://www.smh.com.au/news/planning/confessions-of-a-student-planner/2006/10/02/1159641264881.html

Julia


----------



## Realist

Julia said:
			
		

> Interesting comments from a financial planner in training.
> 
> http://www.smh.com.au/news/planning/confessions-of-a-student-planner/2006/10/02/1159641264881.html
> 
> Julia




Excellent article Julia.

A fool and their money are soon parted..


----------



## Realist

> A case for DIY
> If you invest in an active shares fund, you regularly pay 1.9 per cent in fees and in the vicinity of 1 per cent more in tax due to the extra turnover of shares. Therefore you can lose about 3 per cent a year just in fees and taxes. This compares to no fees and extra taxes if you hold shares directly and do not sell them.
> 
> The 3 per cent can make a massive difference. For example, if you invested $20,000 and received an average real post-CPI return of 12.1 per cent, which is what the Australian sharemarket returned from 1985-2005 (11.1 per cent plus franking credits = 12.1 per cent), you would have $1.9 million in 40 years. If your return was 3 per cent less, you would forgo more than $1.2 million over the same period.
> 
> You gamble on the hope that the active fund more than makes up for the fees. A very small minority of active funds manage that over 10 years; even fewer active funds do so for longer periods.
> 
> Betting on a very small minority is gambling. Oh, and when you lose, you often lose big: many underperforming active funds underperform by a lot.




Like I said before Julia - 12% is a good return... No taxes, no fees and you are laughing!!


----------



## Realist

> You only need to make an average of 17 per cent a year on shares for 40 years and you are the second richest man in the world (Warren Buffett). Very, very few people really seem to understand the significance of these percentages.




And the more you trade the more you lose.

No one ever listens though...


----------



## BSD

Regardless of how good all these gun bull market traders are at making money - many of them dodge a good planner and dont see the benefits of paying 15% (or less) on profits instead of 40%+ marginal rates.

The $1100 you pay to the spivvy planner may save $100,000s in tax over a few years by him offering a solid tax strategy

The dirt of the old planner is only matched by the arrogance/taxbills/capital losses of the cocky 'DIY/I know everything' trader w@nkers


----------



## Realist

BSD said:
			
		

> The $1100 you pay to the spivvy planner may save $100,000s in tax over a few years by him offering a solid tax strategy
> 
> The dirt of the old planner is only matched by the arrogance of the cocky 'DIY' trader w@nkers




Rubbish.

Rubbish.

And Rubbish.

Please explain one example of a tax strategy a DIY investor could use to lower their tax they do not use now?


----------



## BSD

Mate you wouldnt know how to structure a family with $5 million in assets - because (apart from a lot of other things) Buffett and Graham have not taught you the important points of Australian Tax Law

Many folk have no real idea of how good planners work. Big ones dont even talk investment strategy - only tax


----------



## Realist

BSD said:
			
		

> Mate you wouldnt know how to structure a family with $50 million in assets - because (apart from a lot of other things) Buffett and Graham have not taught you the important points of Australian Tax Law
> 
> Many folk have no real idea of how good planners work. Big ones dont even talk investment strategy - only tax
> 
> But keep your head up your @ss Realust - it is obviously comfortable for you




Keep the insults to yourself, and just answer my simple question please?


----------



## wayneL

BSD said:
			
		

> The dirt of the old planner is only matched by the arrogance/taxbills/capital losses of the cocky 'DIY/I know everything' trader w@nkers




Why the hostility towards DIY traders?

That seems such an unreasonable response.


----------



## wayneL

Realist said:
			
		

> And the more you trade the more you lose.
> 
> No one ever listens though...




:sleeping:

For the 56,935,363,162,095,067,451,495,595,111,540,678th time, 'cause it ain't necessarily so.


----------



## BSD

wayneL said:
			
		

> Why the hostility towards DIY traders?
> 
> That seems such an unreasonable response.




It probably didnt come out right. Apologies. 

My point is that for $1100 a good planner can save an investor many $100,000s of tax by structuring appropriately.  

They may even be able to convince someone of diversifying some risk away from their own management skills. (maybe not)

You would be amazed by the inefficient way people structure themselves and the costs involved in righting past wrongs that could have been avoided by planning a little.

Contemplate the difference on after tax returns and lifestyle between paying 0% tax for thirty years in retirement as opposed to 45%. It may be worth paying 100bps for someone to look after it for you when you look at it that way?

The attitude to strategic planning from many on these forums is very tired. Throw away lines and ignorance abound. 

1. You dont need to hand over management of your money
2. You can invest directly (no funds)
3. You can bear the risk yourself
4. Most accountants have few skills in superannuation and most have planners personally

How may threads are on this site saying: "i saved/borrowed $20K, traded CFDS/OPTIONS/FUTURES/PENNIES and blew up"??? 

Some even paid $3000 to learn how to blow up

I dont wish to pretend the world is not full of spivvy sales focussed planners, but there are also a lot that have a skill set worth tapping into, regardless of whether you trade 5% or 100% of your own book.


----------



## tech/a

See your point BSD.



> Some even paid $3000 to learn how to blow up




*OR MORE.*


----------



## lesm

BSD said:
			
		

> Mate you wouldnt know how to structure a family with $5 million in assets - because (apart from a lot of other things) Buffett and Graham have not taught you the important points of Australian Tax Law
> 
> Many folk have no real idea of how good planners work. Big ones dont even talk investment strategy - only tax




And not all Financial Planners are necessarily taxation specialists.


----------



## nioka

The last financial planner I used talked me into a swiss francs loan which ended up costing me $600,000 ( in 1983 money ) . I had to tell him how to get me out of that or he would have cost me a lot more. Never again.


----------



## Julia

I posted the article because I thought it was a fascinating insight into the already cynical thoughts of a not yet fully trained financial planner.

That's not to say I believe all financial planners are useless.  I have personally benefited immensely from the advice of a financial planner who explained to me strategies that would and have already saved me substantial sums.  From my own resources, I simply would not have had the knowledge to implement these strategies.

I think one of the things to avoid is allowing them to talk you into managed funds from which they obviously get substantial commissions plus the trail for ever after and in which you have little or no control over where your dollars are actually placed.  If you have enough for a SMSF then imo - as BSD has pointed out - the tax savings are very considerable.  But they would need to be when you take into account that leverage can't be used, thus restricting possible profit levels.  I guess nothing's perfect and, if one is getting towards retirement age particularly, a SMSF makes a lot of sense.  

And for younger people  structuring various forms of Trusts can also save a lot of tax dollars.  When it's done well, good financial planning is one of the best investments anyone can make if they have more than a couple of dollars to invest.

Julia


----------



## grumpee boi

Julia and others,

Managed funds are not inherently evil and the person that wrote the editorial should have waited until they had some broad experience in the industry before casting a brush over it.

Please read my ebook at www.cfoc.com.au/financialplanning for an outline on how you can still achieve decent returns using managed funds WITHOUT paying upfront or trailing commissions.  Basically you just have to find an planner that will do so.  The first half of it details the impacts that managed fund fees, trading costs and cgt has on a portfolio.

My approach is not the be-all and end-all because it is diversification.  diversification is a risk-mitigation approach and as such suits a particular type of investor.  a specialist that is an expert in their niche should always beat a diversifier but how many of the general community have the skills let alone the time, personality and means to truly be specialists.  I can answer that for you all - not many.

I think a large part of the problem is that people have unrealistic expectations of a financial planner and wealth creation.  They just want and expect wealth but cannot articulate clearly what wealth actually is to them.  A planners job is not to create untold riches for a client, it is to assist them articulate what makes them happy, how much that is going to cost and how to get them there bearing in mind that client's attitude towards risk.

Once those key factors are identified there are numerous tools at the planners disposal to get the client there.  I am comfortable with managed funds so tend towards those with listed property as a component.  Others may choose direct equities, others direct property, others again - mortgage trusts, hedge funds, cfds, small business and so on.  

My point is, if a client determines (with the assistance of a planner) that 7% per annum compounded over 20 years will more than likely see them achieve their goals and objectives why go for more?  That is, why be a specialist and get greedy just for the sake of making more?  The client states a goal and planners try to help them achieve it as smoothly as possible.  Job done.  I have not met a client that says "I want to make 8 million dollars".  clients want to travel to Macchu Pichu, go running with the bulls, travel around Australia, leave 50k for each grandkid and so on.

It is often the case that all goals cannot be realised and that is where certain trade-offs are necessary - work longer, save more with a second job, lower expectations and maybe even go for more aggressive investments.  this is the time where a little specialisation may be necessary although i prefer to ramp up the growth component of a portfolio above the client's usual tolerance towards risk (if unwilling to make other compromises).  i really believe in the value of diversification and having clients understand where it is they really want to be and just how much that will cost.  They may even be pleasantly surprised to learn that they don't need as much as they thought.

Finally, as others have said, getting something as seemingly insignificant as the structure, the owner and so on could mean the difference between needing 8% per annum or 7%.  There are so many value-added services planners can provide.  don't poo-poo on all of us.

just some thoughts,
Adam


----------



## Happy

I am guilty of not reading every post in this thread, and my grudge against planners is that they take your money, give expert advice and do not take responsibility for their failures.

Hope, builders and some other professions do not use this ‘little trick’.

And the biggest joke is requirement of your signature that you take responsibility for your actions under their advice, and yet you might be complete novice to financial matters without neither knowledge nor experience.

I suspect that in 50 responses this would be touched already, but just in case it wasn’t.


----------



## JJKools

very interesting read on financial planners however many of you really do fail to realise the importance of one. Now, there is no doubt there are bad planners, and old school ex insurance agent type planners who give the industry a bad name, however the "newer" generation of planners offer expert solutions in such a wide area covering Investment, tax, superannuation, centrelink issues, insurance, estate planning to name a few. A CFP (certified Financial Planner) has met strict guidlines and experience cirteria and is regared as the industry;'s most professional international qualification.
To bag financial planners is really a thing of the past. They are crucial to our society in educating, implementing sound strategies to meet individuals and families needs. The more savy investor may not need there advice, thats fine, but i bet there is one area of a financial planners expertise they could still utilise - superannuation, insurance, estate planning?

Accountants are interesting, there fundamental job has always been tax - this is what they are great at. They are not and have never been investment 
advisers!!! They are often tax driven in making investment decisons which is not always the best way to go. Would you invest in tax effective trees, plantations or almonds? Great tax benefits but they are poor investments (often). 

A financial planner may not be everyone's cup of tea, but to constantly bag them is very wrong and shows a lack of understanding of what they can truely do for you. 

Cheers


----------



## Happy

They would have to clean up their act first.

Name and shame and deregister shonky players and chase their wealth to compensate clients who lost money due to their unscrupulous tactics.

Should there be compulsory upgrade of their skills, if tax driven advice is outdated and incorrect?

Maybe something else to boost confidence of general public.


----------



## sails

JJKools said:


> very interesting read on financial planners however many of you really do fail to realise the importance of one. Now, there is no doubt there are bad planners, and old school ex insurance agent type planners who give the industry a bad name, however the "newer" generation of planners offer expert solutions in such a wide area covering Investment, tax, superannuation, centrelink issues, insurance, estate planning to name a few. A CFP (certified Financial Planner) has met strict guidlines and experience cirteria and is regared as the industry;'s most professional international qualification.
> To bag financial planners is really a thing of the past. They are crucial to our society in educating, implementing sound strategies to meet individuals and families needs. The more savy investor may not need there advice, thats fine, but i bet there is one area of a financial planners expertise they could still utilise - superannuation, insurance, estate planning?
> 
> Accountants are interesting, there fundamental job has always been tax - this is what they are great at. They are not and have never been investment
> advisers!!! They are often tax driven in making investment decisons which is not always the best way to go. Would you invest in tax effective trees, plantations or almonds? Great tax benefits but they are poor investments (often).
> 
> A financial planner may not be everyone's cup of tea, but to constantly bag them is very wrong and shows a lack of understanding of what they can truely do for you.
> 
> Cheers




I certainly hope there is a new breed.  

We have been to at least half a dozen "financial planners" over the last few years and, without exception, they all want your money and super funds under their management - with hefty fees, of course 

The latest was a classic - not only sugested managed funds, but also suggested taking a mortgage over the property to double the funds under management.  Reckoned there was a good possibility of doubling the money in managed funds over the next seven years - oh, how to bait with the greed factor 

With 2% (I think it was 2 - may have even been 4%) annual fees + paying over 9% interested for the borrowed amount - it would have to be a pretty steady bull market to even think about doubling in seven years.  

Great cash flow for the "financial planner" (aka salesperson) with annual income from the managed funds plus mortgage set-up costs + annual trailers on the loan.  

And, if the plan failed and the funds lost money - we (not the FP) would be  liable to pay the on-going fees + mortgage - and eventually have to pay back any shortfall.  Very poor risk to reward for the customer.

And, each time visiting a FP, it has been to make sure we are structured as best as we can for future retirement.   At no time did we go looking for somewhere different to invest!

Needless to say, these little fish swam away as fast as they could go...

Sorry JJkools - do you really wonder why they get bagged?  

End of rant!


----------



## adobee

BSD said:


> Mate you wouldnt know how to structure a family with $5 million in assets - because (apart from a lot of other things) Buffett and Graham have not taught you the important points of Australian Tax Law
> 
> Many folk have no real idea of how good planners work. Big ones dont even talk investment strategy - only tax




I would expect that if I wanted to get advise on my $5million family trust I would consult my CPA.

What are the differences educational differences between a CPA and Financial Planner ??

I personal feel financial planners are like realestate agents. There are many who are great guys and give honest professional advise however when it comes to the end of the day they get paid / make there money buy selling something a property or a product, thus they have a conflict of interest. Generally your CPA will charge you a fee for the advise and (generally hefty too) but there is no conflict.


----------



## austek

Agree Adobee, I too would like to know the actual structure of the various FP courses.  Are they taught wealth creation for clients in the syllabus at all?

I have read right through this thread and felt Tech/a & Happy were too kind with their comments.

Liked Julias excellent article by an FP trainee, especially the bit - "Diversification reduces risk, but the more you diversify the more you pay"

Great comments by Visual & Rub92me as well.

'Money Tree' I think you should quit while you are behind.  You have nothing to offer that would get your respect and credibility back.  You speak of $250 expenses I met clients that lost millions not parting with a few lousy hundred.

The tough bit for retirees is, it's most likely the first time they have had a fist full of dollars in their 40 years of working life. Certainly was in my case and that of my retiree friends and aquaintances.

I held the "Golden Handshake" cheque for only seconds, and that was because I asked to zerox it first, before handing over to my selected FP, who was standing next to the Plant manager as I walked in to receive it.

Compared a dozen planners over a 2 year period and almost all preferred a 'buy & hold' strategy of shares & a managed fund.  Makes their job easy I guess.  Banks diversifies all right, as long as all the money is held within their own bank. 

  Was surprised & a bit sus that many FP's answered that their previous work history was "Insurance Salesman" not that I have anything against insurance salesman, but it sure was a very very common trait.

During 2001 & 2 my FP lost $750k of my retirement savings (tech crash) and left me with $180k Jan 2003.  Trading saved my life, I have never had a losing year and except for the struggle in that first year by having to go on the dole to live, I have lived well and doubled the Equity.

The first years struggle had nothing to do with my trading, as I made a creditable $50k in that first year, followed by a great and memorable 2006.

Up 51% on Super and 105% on a private a/c.  Cannot say the same for 2007.
Seems like it's 2 steps forward and one step back.

Left the planner with a handshake and no obvious signs of hard feelings, and spoke to a Queens Counsel recommended to me with expertise in that area, who was extremely helpful with advice.   Also said he tried many court cases where an FP sets up shop with a $5mill return to himself, loses the clients money then sets up shop again.  Identical to my own experience.

They cover themselves with signatures from the clients on whether they are cautious or aggressive and you can guess what I was.

I found out about his hidden commissions by doing  some research with Finance companies and accountants after we parted.  The 'Buy & Hold ' strategy is the bit that hurts as I firmly believe 'buy & hold' is dead.

Never could trust anybody with my finances again, and wrongly or rightly taught my self to trade without lessons and minimal advice on forums, although I now subscribe to Nick's Chartist group and the Brighton bayside Blue Chip Society.

Actually I am thankful the way it turned out, all thru my working life I was obsessed with the idea of working for myself and now I am, and happy to be among others with similar interests.


----------



## Trembling Hand

Austek well done for going it alone and finding the way to do it yourself.


----------



## macca

Hi Austek,

Good Onya


----------



## awg

Have recently been making the decisions myself.

I dispensed with my planner because I was outperforming him with my decisions over the last 2 years, and he did not tell me about some things that would have improved my returns ( I drew his attention to them, not the other way around!)..also could not comment on tax or share picks

Have interviewed quite a few planners

I eliminated nearly all of them straight away( over the phone) because they charge a % commission on my entire balance, which is quite substantial, and could not give complete advice.

I wanted a fee-for-service model, and would be prepared to pay high hourly rates.

Also I wanted an advisor that could comment on Tax, Superannuation and Share market advice, as well as general advice.

I could only find 2 that were remotely suitable, both fully independant.
One was excellent, a CPA, SMSF specialist and hot shot share picker ( according to him)...he charged a commission tho, which he offered to halve.

I was very impressed with him..he said he really wanted me onboard, and only offered to reduce his commission because he was impressed with my astuteness...we had a good discussion, he is in business to generate profit, and reducing his commission is not an ideal way to do that. He prefers full fee payers, of course

The other guy was an SMSF specialist, his rate is $320 per hour.

They are all legally bound to give an initial written advice considering ones overall financial position...this costs $1000-$2000 to have prepared.

In the end I decided to go with a low cost SMSF, no financial advisor, for the reason that I have a fairly exact plan of action, already mostly in place.

If I match the index, I will save at least $15,000 per year, on my previous plan. (yearly savings will increase with time)

Of course, I still utilise an accountant, who can advise me on tax and SMSF issues, he charges an hourly rate.

Whilst I was researching my options for setting up my SMSF, I spoke to an independant SMSF group located in Sydney...they told me they had interviewed "hundreds" of financial planners, in order to find someone independant to recommend to their clients...THEY COULD NOT FIND ANYONE SUITABLE.

I find this amazing...I would have thought there is a niche market for hourly rate charging financial advisors, you would have to believe that if someone charged $200 per hour (like accountants), they would be very busy.

Having said that, I can see why they prefer commission, and high net worth clients..they ARE in business to make money.

It is with some trepidation and reluctance that I eventually decided to go on my own...it takes a lot of time and research and learning, but ultimately one has to take responsibility for financial decisons, an advisor can only advise.

If, after benchmarking my returns, I am behind, or it all gets to hard, I can always go back to " financial advice".

I find the legal restrictions now placed on advisors to be over the top for me personally, because I can understand most concepts fairly well, although I can totally understand why they are in place to protect many persons with less knowledge than me.

I like this forum, and learn a lot, it is great to share knowledge, even though I  see that ASIC provisions are affecting sites like this, and one must be astute enough to weed out info what is incorrect or misleading.

I think it is great that people are prepared to put forward their OPINIONS,
with the reminder that it is NOT ADVICE.

I also think it is very good , and courageous, that others are prepared to publicly disagree, even though it may seem a little discourteous at times.

In this manner, forums like this, are very educational.

Thankyou to all contributors

regards tony

ps, If anyone does ever find an advisor, in the Newcastle, NSW area who works like I described, I would be happy for them to send me a PM


----------



## Trembling Hand

awg said:


> I wanted a fee-for-service model, and would be prepared to pay high hourly rates.
> 
> Also I wanted an advisor that could comment on Tax, Superannuation and Share market advice, as well as general advice.
> 
> I could only find 2 that were remotely suitable, both fully independant.
> One was excellent, a CPA, SMSF specialist and hot shot share picker ( according to him)...he charged a commission tho, which he offered to halve.





Why not look for two different people rather than an all in one.

A good account to administer and do the Tax stuff and
and a good full service broker. They are out there. Somewhere.

If you have a fair bit of $$ you should be looking and able to pay for specialist.


----------



## awg

I agree Trembling H, that it is a good idea to have a relationship with at least one broker.

I should have mentioned in my previous post that I do, for various reasons, use a broker quite often, as well as online trades.

I suppose it is very much my wishful thinking, to get the perfect all-round wiz, at a low price!

I still reckon there would be a good niche market for such a service. Solicitors & Accountants do alright on a good hourly fee structure.

Maybe it is too hard for real independants?,  there is a lot to know, a lot of responsibility, and you would be concerned about being sued, when some random market force inevitably crashed into your advice. The legal protection provided by working for the larger firms would be reassuring

I am curious what % of users of this list utilise a financial planner,
I think it would be fairly small.

I do not mean to disparage financial planners in any way.
It is a neccesary service for many people.  

regards tony


----------



## tech/a

Ive been talking on this topic over on this thread
https://www.aussiestockforums.com/forums/showthread.php?p=265438#post265438

Thats not the place for the topic.
So important is the topic of self sufficiency on retirement and those who are there to supposedly guide us that I'm going to continue here.

Firstly to the 2 posts I wish to address specifically

*Temjin*



> Tech/A, I can sort of understand you because I have been in your position before (for a short while). That is, being quite biased against the so called "professional financial advisers" because I felt they don't know how to advise their clients to act on opportunities to produce "wealth". (i.e. identify the bull run in properties, identify the opportunities in share trading, identify resource boom, etc) I was also against their risk management and investment advise, that is to diversify and invest for the long term. (buy and hold) And then their salesman attitude to maximise commissions and to make recommendations not in the best interest of their clients.
> 
> As someone for me who is very much into future/forex tradings, and investment in "a single basket" without much diversification, I am actually trying to change my career into the financial planning industry even with those biases.
> 
> The fact is, FINANCIAL ADVISERS have NEVER been responsible for helping their clients to speculate and/or recommend actions on opportunities based on predicting economic cycle turn around and/or other contrarian "alternative, non-mainstream" investments. This include trading and how to succeed in it. They are not here to help you to create extraordinary wealth, and I never expected to see anyone who would give you that advise in the first place.
> 
> If you want a "professional" to help you with that, then well, I doubt there is anyone out there that could help you. Maybe the best person you could talk to on "investment ideas" is YOURSELF.
> 
> The fact is that a great majority of the population are not spectuators or professional/dedicated investors. Even highly successful entreprenuers are not as investment minded and focus more on their business. This is where financial advisers come into play, to assist them with "general" strategies to protect wealth, minimise tax and basic wealth creation.
> 
> The stuff that a lot of us are doing, speculations in shares/futures, properties, are not mainstream stuff. Mums and dads, rich retirees, and successful businessman do not want advise in such stuff. Maybe they do, but why would any financial advisor would put themselve and their career at risk by advising on speculating for massive wealth creation?
> 
> Maybe your circumstance do not require the service of any financial planner. A specialist in taxation, accounting, legal stuff or business planning might be more suitable for you and your investments.
> 
> But I agree with Tom still, there ARE some high quality financial advisors out there who aren't just trying to hard sell their "recommended list of products" just for the sake of commission. I don't plan to be that at all, hate to be a hard sale guy anyway. (that's why I hate those credit cards salespeople)
> 
> My 2 cents worth.




*And Tom*



> OK; I'm not going to engage in a long OT discussion about what financial planners should or should not do according to some people's opinions. I think Temjin has made some good points in his post, so I'll leave it at that.
> 
> Perhaps just a short addendum for the benefit of tech/a:
> 
> You may have good reasons for disliking financial planners and as I pointed out in my previous post, many of those reasons are fully justified. However what you would clearly like to see financial planners deliver is simply not going to happen for all sorts of reasons, several of them being legislative ones.
> 
> Financial planning is one of the most tightly regulated industries out there and unless you are very familiar with the regulatory framework, you will simply have no appreciation of the fact that no Australian Financial Services licensee will allow you to provide the type of service/approach to investing you clearly favour; regardless of whether you as a professional are able work that way & deliver for your clients or not.
> 
> If you advise a client to concentrate all his/her investment assets into one asset class, you will get into trouble because no AFSL licensee compliance officer will let you do that. Even if you get your own licence, you will be playing with fire because you can never be certain that a black swan event will not occur, which will wipe your client out. Consequently no professional indemnity insurer will cover you when you inevitably get sued.
> 
> Unfortunately - or perhaps fortunately, depending on one's POW - we all have to comply with lots of regulations many of which we sometimes do not agree with. That is the condition of obtaining and working under an AFS licence.
> 
> With respect to your comment about how a good accountant could give the sort of tax advice I mentioned before: Sure s/he could. But show me one who will. The majority of accountants are reactive rather than proactive and not trained to employ creative thinking. You may not believe me, but as a SMSF specialist I deal with accountants all the time, so I do know what I'm talking about.
> 
> Anyway, enough on this topic. It was not my intention to divert this thread from property to financial planning; these have been responses to some points raised by others.
> 
> I'm going away overseas for the next 3 weeks so there will be no further postings from me for at least that long. I mention this so nobody thinks that I ignore private messages or other relevant posts.
> 
> Cheers,
> 
> Tom R




Points raised by each are indeed very important for all of us.
The TRUTH is that even if they could work (Financial advisers/planners) un tethered---the best we can expect is on the longterm mediocure results in our investments---to out perform the market by a few % is the accepted barometer for success in the minds of most clients and certainly in the minds of advisors. But what about when those managed funds underperform and often for years? Diversify---into what?

Not only that but the biggest problem I see with Super is that by putting away as much as we can for the tax breaks *we lose one of the most powerful tools we have. Capital base and leverage.*

Due to charater length I'll post more below.


----------



## tech/a

*we lose one of the most powerful tools we have. Capital base and leverage.*

Once in Super we cannot leverage like we can when we have the same funds in equity or spare capital.
We cant take advantage of that Margin account or take advantage of that property deal (on 20% down)---even if its in 10 years time! We cant buy that business for passive income.

Those that work in the Financial industry have exactly the same problem we all have.96% of us are going to come to retirement age with a very sad lack of funds to see us through the hopefully 30 years of retirement we have worked our butts off for.

*Let alone enjoying it with no care about money.*
I came to this blinding flash of the obvious at 40,after going through a Midlife crisis---realizing that after 18 yrs of working for myself I had precious little to show for it.

So like all of us I searched out Financial advice---leading me to have absolutely no faith in these experts guiding me to financial mediocrity.

They did however concrete in my mind that there were only *THREE* mass creators of wealth available to the common man.
(1) Working for yourself and building your own "Empire"---I wasnt very good at this.

(2) Property----Id tried and failed.

(3) Shares----knew less than nothing.

So with no joy from the Financial sector what to do?

*My solution was to actively search out MENTORS* (No Wayne I do not wish to be ANYONES mentor!).

I wanted and still actively search out people with *a proven track record in the specialty in each sector listed above.* I'm more than happy---NOW-- to pay these people for their time.

As an example in the Business sector I had trouble growing my business beyond a few employees.I seached out someone who had grown and was still growing their business well beyond my wildest dreams.

It cost me a phone call and lunch.
This is what I learnt and it stood my Business on its head.

"You MUST HAVE the right people in the right position,if you dont have the right people find them,if you have people now in the wrong position place them in the correct one"

No Financial Planner or Advisory would have given me such a gem.The majority of them could have more than benifited from the exact same advice.

My point is simple
Take care of your future---*yourself*---there is no one better qualified.
So become the RIGHT person in the RIGHT job of securing your financial future.

We all will need *passive income *and if we get good at even one of the three listed above this is where you'll find it in abundance.
Annuities wont supply it in abundance.


----------



## Temjin

tech/a said:


> *we lose one of the most powerful tools we have. Capital base and leverage.*
> 
> Once in Super we cannot leverage like we can when we have the same funds in equity or spare capital.
> We cant take advantage of that Margin account or take advantage of that property deal (on 20% down)---even if its in 10 years time! We cant buy that business for passive income.




Robert Kiyosaki's teaching - Using OPM (Other People Money) and Leverage.

The fact is that leveraging is inherently risky for the majority of the population who are risk adverse and do not possess the necessary financial intelligent to manage the risk. 

Super is probably the only way for them to maintain their wealth through to retirement via favourable tax treatment. If you want to create massive wealth, then one has to look elsewhere. 



> Those that work in the Financial industry have exactly the same problem we all have.96% of us are going to come to retirement age with a very sad lack of funds to see us through the hopefully 30 years of retirement we have worked our butts off for.
> 
> *Let alone enjoying it with no care about money.*
> I came to this blinding flash of the obvious at 40,after going through a Midlife crisis---realizing that after 18 yrs of working for myself I had precious little to show for it.




Sadly, that is so true for the majority of the people coming into retirement soon. That's including my parents and one of the main reason why I need to accelerate my wealth to make sure they maintain their standard of living after retirement. 



> So like all of us I searched out Financial advice---leading me to have absolutely no faith in these experts guiding me to financial mediocrity.




Is this what I think of what others think of financial advisors? That they are the ONLY solution to your financial problems? That if they can't help you, then no one else can? That they will make you "rich" and be ahead of the average group? 

Unfortunately, this is not the way how financial advisors work, and will never be. The fact is that the majority of the population probably do not possess the ability to maintain their portfolio (if any) at even medicore level. (i.e. average market growth rate) Nor have the knowledge to minimise their taxation obligations. This is where advisors come into play here, to maintain their mediocrity by making maximise use of their wealth in the most practical and "legal" way. 




> They did however concrete in my mind that there were only *THREE* mass creators of wealth available to the common man.
> (1) Working for yourself and building your own "Empire"---I wasnt very good at this.
> 
> (2) Property----Id tried and failed.
> 
> (3) Shares----knew less than nothing.
> 
> So with no joy from the Financial sector what to do?
> 
> *My solution was to actively search out MENTORS* (No Wayne I do not wish to be ANYONES mentor!).




I agree, the only way to create massive wealth beyond mainstream advise is to do something different and don't follow the herd. One need to be prepared to take additional risk that otherwise be viewed as "inappropriate" from majority of the financial planners. For reasons what Tom have said already, regulations and policies and in consideration of the person's ability and knowledge to take that risk. 

It is either create your own business and produce wealth.

Or invest and grow your wealth. 

Both can be magnified by using other people time or money through leveraging. And in managing risk and maintaining that competitive advantage. 



> My point is simple
> Take care of your future---*yourself*---there is no one better qualified.
> So become the RIGHT person in the RIGHT job of securing your financial future.




That is always true in a lot of case.

Unfortunately, and again, the majority of the population is not even qualified of securing their own financial futures. To think about creating massive wealth for them is simply impossible. 

Anyone will benefit from the advises from a qualified and professional, ethic financial planner. If one wish to take risk beyond what a planner is able (and restricted) to advise you, then you will be the only one who is responsible to make it happen.


----------



## Insan3

Temjin said:


> Unfortunately, this is not the way how financial advisors work, and will never be. The fact is that the majority of the population probably do not possess the ability to maintain their portfolio (if any) at even medicore level. (i.e. average market growth rate) Nor have the knowledge to minimise their taxation obligations. This is where advisors come into play here, to maintain their mediocrity by making maximise use of their wealth in the most practical and "legal" way.
> ......
> 
> Unfortunately, and again, the majority of the population is not even qualified of securing their own financial futures.




Temjin, I think this is the most important thing people on this forum need to realise. 

I'm another who is studying Dip.FP with an aim to move into Paraplanning.

Of course, people on Investment forums will not see the benefit in seeing a Planner, due to the 'Insurance Salesman' types still out there. They feel they can do it themselves - And I believe they can. People who are interested in Investment Forums, Investment Mags, Seminars, Annual reports, etc are going to teach themselves many, many things and can become quite successful from this. 

This is the same for many things - can teach yourself to sew, cook, run a business - As long as you have a high level of interest, you can do many things yourself.

I feel Financial Planners are going to prove important for the remaining 99% of the population. The $100k/yr Tradies who read People mag instead of FinReview, the Doctors who work too much to learn anything else, the vast majority of the population who treat the financials on the news as the beginning of the ads and walk away.

I've seen it in my own circle of family and friends... my parents who took Investment advice from an Accountant to minimise Tax - Created a $50,000 loss when their Agri Investment died in the drought (and they are low risk tolerant - won't buy shares - and they were talked into AGRI!!!) My successful friends in great jobs who can't seem to afford anything other than their BMW, and have 0 growth assets.

People in general don't realise how low the pension is... or the issues that we will face in the coming decades when the ratio of workersensions moves from 4:1 to 2.5:1. will the 2.5 have to pay more taxes to support the retirees? I don't think so..... The view of an FP is not to help the super-rich, or to make you super-rich, but to help make sure that when age 60 rolls around, you aren't eating canned food.... It's all about keeping things comfortable and balanced by investing in areas to keep ahead of inflation, etc, Financial Planning is not a get-rich plan, it's a 'not living on the poverty line if the $hit-hits-the-fan' plan......

These people need to be told about Diversification, Risk Tolerance, Planning for future goals, ways to minimise tax, etc, as they have absolutely no idea, and no real interest in learning themselves.
The same as when many of us hear a noise under the bonnet of the car.. we too have no idea. This, I feel, is where the planner is required. help those who cannot/will not help themselves.

Ethics and looking out for No. 1 is a different story. But hey, nothing stopping that mechanic charging us $1500, for changing a fan belt....

Anyways, that's enough of a detour from studies 

/rant over :


----------



## tech/a

The point I'm making is that 99% of us dont realise what is needed to be able to retire financially independant.
Assuming an inflation rate of 3.1% over the coming years if you wish to retire financially free then you'll have to reach MULTI millionair status.

Lets take a case of a 30 yr old with the following Stats.




If he can increase ALL 100% of his nest egg 10% a year compounding he will fall short if retiring at 65 let alone 55

Its not until he can achieve 12% compounding that he has success.
Needing over 4 million upon retirement





If your 50 now and dont have a million NOW then you wont make it either.




You also need 1 million NOW and 4 Million upon retirement.




All of us including Financial Advisors will need to achieve wealth which SOME would see as greed!
Conventional methods of tucking away funds for retirement wont cut it.
To expect un leveraged Super contributions to maintain 10-12% compounding over many years is un realistic---even Financial planners wont guarentee that! A year or 2 well below the target rate kills the end result.


----------



## noirua

Charts are all very good but everyone has different circumstances. Financial Planners could once again be a thousand kilometres out in their predictions if interest rates move down to 2% and inflation to -2% or interest rates to 15% and inflation to 25%. 
Anything can happen and it's best, from my experience, to spread investments into at least 10 sectors and 20 is probably best. Then in virtually every group of countries in the World.


----------



## tech/a

> from my experience, to spread investments into at least 10 sectors and 20 is probably best. Then in virtually every group of countries in the World.




Lets see say 10 countries,diversify into 20 sectors thats 200 investments or $2500 over a $500K Investment portfolio.Say 50% perform at 10% or better the rest under perform.

Tongue in cheek I'm sure.

I'm not tongue in cheek though and the figures I entered were deliberately conservative---well I thought they were.
Lets be certain of one thing.
Making a Million wont cut it.


----------



## Insan3

noirua said:


> Charts are all very good but everyone has different circumstances. Financial Planners could once again be a thousand kilometres out in their predictions if interest rates move down to 2% and inflation to -2% or interest rates to 15% and inflation to 25%.
> Anything can happen and it's best, from my experience, to spread investments into at least 10 sectors and 20 is probably best. Then in virtually every group of countries in the World.




Yes, correct.

Everyone has different circumstances.
Financial Planners might be short of predictions if the market moves in an unexpected way.
Yes, sector diversification and market diversification is a good idea.

The thing is -
Your plumber won't know this.
Your mechanic won't know this.
Your doctor won't know this.
Your children's teachers won't know this.
99% of the population won't know this.
Personally, I don't have a single family member or friend who has made a financial plan, or who would read Investment forums, or would invest in shares....

At least an FP will create a plan. Even if the plan falls short, you would imagine in most cases, it would be better than no plan. An FP would ask their client about their circumstances

Heck, I've got a number of friends who think that the 9% Employee Super Contributions is going to be enough. I've got friends aged 25 who think $45k/yr will suffice in retirement..... in 2050??? Ask them to factor in Inflation of 3%... they look at you blank. Tell them by then, a 2L milk may cost $12 (Based on current $3.70 price + 3%/yr x 40yrs), they laugh.....
Tell them weekly groceries that now cost $200 may cost $650...

We'll see how much they are laughing when they have $400,000 of super in retirement .... let's see how they are doing when they hit 80....


----------



## tech/a

For those who wish to have a play with the calculator.

http://www.bloomberg.com/invest/calculators/retire.html

Also view the reports to see the power of compounding.


----------



## robots

hello,

greeaat to see Ken Done taking on the these sharks that call themselves financial planners,

whether it be a large or small organization,

they are only concerned about their own financial planning when you walk thru the door,

go direct

thankyou

robots


----------



## robots

hello,

another great effort:

http://www.theaustralian.news.com.au/story/0,25197,23695545-25658,00.html

be very very careful if you go to financial planners,
direct property or direct shares and sit tight

have a great day
thankyou

robots


----------



## TheRage

robots said:


> hello,
> 
> another great effort:
> 
> http://www.theaustralian.news.com.au/story/0,25197,23695545-25658,00.html
> 
> be very very careful if you go to financial planners,
> direct property or direct shares and sit tight
> 
> have a great day
> thankyou
> 
> robots




Robots both of your posts infer that all Planners are cast with the same brush. A little more research than simply two articles needs to be brought to bear before passing judgement. I am a Financial Planner and have sat on the sidelines watching this thread with interest and have no commented for my own reasons.

However I do find the comment that all Financial planners only care about their own financial planning quite repulsive. I treat my clients money whether they be high net wealth or low net wealth as if it was my parents money, who by the way I manage also. I respect people and their money and I have built wealth outside of being a financial planner through shares and property. I work because I like helping people and educating them on how to become more financially savy. I will admit though that becoming a multi-millionaire is beyond the realm of most people even with discipline and compounding and I also think Tech has raised some very valid points about mentoring. 

Please tell me what idustry all of you work in so I can make rash statements about your profession. For the record all fees are now disclosed to clients and I even go further by writing a letter with a quotation of excatly the cost of doing a job like a tradesman would, I do not charge trailing commissions. So to say that the industry is full of sharks given the regulation we follow is absurd. Next time you go to you accountant and he says to you I think you should put your money into cash becasue I think the sharemarket will go down over the next year. Let him know that he has just broken the law unless he puts it in writing to you.


----------



## Macquack

TheRage said:


> Please tell me what idustry all of you work in so I can make rash statements about your profession. For the record all fees are now disclosed to clients and I even go further by writing a letter with a quotation of excatly the cost of doing a job like a tradesman would, I do not charge trailing commissions. .




Firstly, everybody knows trailing commissions are a rort.
Secondly, "all fees are disclosed to clients", big ****ing deal.
Finally, what really pisses me off is you guys want a big *pat on the back* for doing what everyone else considers to be *just fair and reasonable*.
Macquack, builder for the record.


----------



## TheRage

Macquack said:


> Firstly, everybody knows trailing commissions are a rort.
> Secondly, "all fees are disclosed to clients", big ****ing deal.
> Finally, what really pisses me off is you guys want a big *pat on the back* for doing what everyone else considers to be *just fair and reasonable*.
> Macquack, builder for the record.




Did I say I wanted a pat on the back. 

What is fair and reasonable, charging someone $30,000 for a deck or extension which you make $20,000. Is that reasonable Mr Builder. I estimate my time to precision on the jobs that I do. My hourly rate is $200 but I reckon yours is much higher. 

Have I seen you contribute to threads in this website in a positive and constructive way and provide information consistently that others here would not know. I guess being a builder gives you an opportunity to tell others about all of the super rules doesn't it. 

Then again if you made an appointment to see me I would not keep you waiting but if you were to come round to give me a quote on a job I would still be waiting. Now there are some generalisations for ya!!!


----------



## Mofra

robots said:


> hello,
> 
> greeaat to see Ken Done taking on the these sharks that call themselves financial planners,
> 
> whether it be a large or small organization,
> 
> they are only concerned about their own financial planning when you walk thru the door,
> 
> go direct
> 
> thankyou
> 
> robots




ROFL!!!

This from a Real Estate Agent!!


----------



## Mofra

Insan3 said:


> I'm another who is studying Dip.FP with an aim to move into Paraplanning.
> 
> Of course, people on Investment forums will not see the benefit in seeing a Planner, due to the 'Insurance Salesman' types still out there. They feel they can do it themselves - And I believe they can. People who are interested in Investment Forums, Investment Mags, Seminars, Annual reports, etc are going to teach themselves many, many things and can become quite successful from this.



I've also just started the DFP, and have recently moved careers into Para-Planner world (of sorts) already.

I'm wondering how many people criticising Financial Planners have been to one? I've been investing actively for a number of years and I still found my FP meeting quite a useful one, even if just to bounce ideas off someone qualified to offer his or her opinion & have that opinion binding by professional agreement.


----------



## Duckman#72

TheRage said:


> Next time you go to you accountant and he says to you I think you should put your money into cash becasue I think the sharemarket will go down over the next year. Let him know that he has just broken the law unless he puts it in writing to you.




Hi Rage

You have just highlighted the one of the major problems with financial planners and the industry as a whole. Have another read of your sentence. You don't make any judgement on the qualification of the accountant. Your answer is to "get it in writing". The stupid thing is that even if it is in writing it could be breaking the law depending on the qualifications of the accountant. The cover-your-ass techniques that have created 50 page Statements of Advice are doing nothing for the Financial Planning Industry. The profession would be better served ensuring higher levels of professional standard rather than developing 50+ page disclaimers designed to bamboozle and deflect criticism from performance.

Duckman


----------



## TheRage

Hi Duckman,

I agree with what you are saying, I guess that is why a lot of accounting practices are now trying to hold an AFSL or become authorised representatives so so they can give investment advice when setting up SMSF.

 I think disclosure is getting better and I spend a lot of time explaining it to clients. By the way my comment was not having a dig at accountants as a profession but merely pointing out the automatic repect that are given to accountants and the lack there of to planners despite the hoops we have to jump to do anything for clients. I think the education standards are slowly raising themselves in the industry and when all the old dinosaur insurance slaesmen are gone the industry can probably achieve a more professional designation. For the record I have  masters of accounting and an undergraduate degree in Science.


----------



## robots

Mofra said:


> ROFL!!!
> 
> This from a Real Estate Agent!!




hello,

ah yes but a "re agent" wont get you to invest in dodgy mezzanine companies will they? 

they are selling you a title and at initial purchase you pay not one fee,

thankyou 

robots


----------



## tech/a

Builder---someone mentioned Builder.

Well thats my lot---add some developement in there as well.
Already told my story once.
Invested (wasted ) $1000 on 2 "Highly recommended" financial Planners.

Their advice was pure rubbish.

(1) Invest $58k a year in Super---If I cant have my $58K do better than a managed fund I'll go he!
(2) Diversification into a number of various funds---basically the same as (1) with a twist.

Could they outperform my own returns over the last 5 yrs----urrr no!
Could they keep up with them----urrr no!
Could they get close to them----urrr no--

When it comes to creating *Real wealth* they really dont have any more answers than Builders---Infact less.

The best result I have found is a partnership.

I make it and my CPA makes sure I keep as much of it as possible.


----------



## Julia

tech/a said:


> Their advice was pure rubbish.
> 
> (1) Invest $58k a year in Super---If I cant have my $58K do better than a managed fund I'll go he!




Tech, Super is simply the vehicle for investing in whatever you choose.
It's not something you invest in of itself.  Investing in managed funds is a separate matter.

The obvious advantage of having investments of whatever variety in Super is the tax advantage, i.e. only 15%.

So, on the basis that you would be in the highest tax bracket, the financial planner's suggestion of putting some funds into investments under the umbrella of Super would appear to be pretty reasonable.


----------



## tech/a

Julia said:


> Tech, Super is simply the vehicle for investing in whatever you choose.
> It's not something you invest in of itself.  Investing in managed funds is a separate matter.
> 
> The obvious advantage of having investments of whatever variety in Super is the tax advantage, i.e. only 15%.
> 
> So, on the basis that you would be in the highest tax bracket, the financial planners suggestion of putting some funds into investments under the umbrella of Super would appear to be pretty reasonable.





Let me then qualify the Pure rubbish statement then.

Firstly they find out what time you have breakfast,and with this copious amount of information pigeon hole you into type of investor THEY think you are or should be.

So they know where you've come from--Financially.

If I have $58k a year surplus then it would be reasonable to assume,I can generate income from investment---they KNOW I can and spent masses of paper to find out.

They know my return on Trading/Property/Development/and business.
Yet all they can come up with is SUPER---wow ----does commission fees and  servicing ring a bell?

Super is the biggest con in Australia today.
Soon as funds are in Super that's it you cant use them until you retire.
If the government were serious about people being self funded they wouldn't have ANY tax on super savings.They'd allow broader usage of funds.Theyd allow creation of genuine wealth---but no they are greedy---they want both--tax and self funded retirees.

What could/do I do with that $58k a year surplus?
(1) Buy another excavator to add to the fleet---nett $50/hr average 37hrs a week.
(2) Add another $120K to the margin account Even with my tax rate I'll out perform any managed fund.---well 99% of them.
(3) Use the funds to service a carving up of a 1200 meter house block to 3 400 meter development blocks.Doubling investment in 12 mths with ease.
Even in these "depressed times".
(4) Service a duplex development.

I sit there at the second interview and go through these and many more looking at these Experts and I get---blank stupid looks.---Financial planners---plan what!

What do I do for super?
I have one investment only.
My business warehouse and property,in my SMSF created in 2005 through to 2007 taking advantage of the bulk funding opportunity's tax savings I couldn't ignore nor the Rent!
Having these funds tied up has been at a cost---one went by which I couldn't fund due to so much being tied up in the SMSF---wasn't recognised.
It was/is an industrial subdivision which would have doubled my investment---sadly for me someone else is doing this now!.

Still it was a decision I made---who's Idea?
CPA.

By the way retirement scares me to death.


----------



## theasxgorilla

tech/a said:


> *Super is the biggest con in Australia today.*
> Soon as funds are in Super that's it you cant use them until you retire.
> If the government were serious about people being self funded they wouldn't have ANY tax on super savings.They'd allow broader usage of funds.Theyd allow creation of genuine wealth---but no they are greedy---they want both--tax and self funded retirees.




Thats a big statement.  As a tax advantaged way of investing for and funding ones retirement I actually thought the current Australian super arrangements were pretty darn good.


----------



## Macquack

TheRage said:


> Did I say I wanted a pat on the back.
> 
> What is fair and reasonable, charging someone $30,000 for a deck or extension which you make $20,000. Is that reasonable Mr Builder. I estimate my time to precision on the jobs that I do. My hourly rate is $200 but I reckon yours is much higher.
> 
> Have I seen you contribute to threads in this website in a positive and constructive way and provide information consistently that others here would not know. I guess being a builder gives you an opportunity to tell others about all of the super rules doesn't it.
> 
> Then again if you made an appointment to see me I would not keep you waiting but if you were to come round to give me a quote on a job I would still be waiting. Now there are some generalisations for ya!!!





Not one of you best posts, TheRage.


----------



## tech/a

theasxgorilla said:


> Thats a big statement.  As a tax advantaged way of investing for and funding ones retirement I actually thought the current Australian super arrangements were pretty darn good.




Yes let me explain.

I remember one poster here Kris who placed everything he could get his hands on into super.
I find this tragic---why.

Well once your disposable savings are in super particularly at a young age they cant be accessed for years. Your basically living from day to day until you can access your savings.
Now how they perform relative to inflation over those years is beyond your control. I'll bet there are many here who have been in super (not their own funds) who are disillusioned by fees and poor performance.

Anyway back to my point.
Kris didn't have any spare funds then to take advantage of any entrepreneurial opportunities that came his way.
Lets say he wanted to start or buy a business---no funds all in super.
Lets say he wanted to take part in the last or any future property Appreciation---cant do no funds all in super.
Lets say he became a very good trader---no good no funds all in super.

Thats why its a con.
This tax saving deludes people into the be all and end all of investment strategies.
The tragedy is that 
A--they are leaving their future to others.
B--The cannot take advantage of their capital.
C--- by the time they realise it its too late.

Money does unfortunately make money and if you have it countless opportunities present themselves---without it you look on in wonder and sometimes regret---as I did.

happy to be convinced otherwise.


----------



## Temjin

tech/a said:


> Yes let me explain.
> 
> I remember one poster here Kris who placed everything he could get his hands on into super.
> I find this tragic---why.
> 
> Well once your disposable savings are in super particularly at a young age they cant be accessed for years. Your basically living from day to day until you can access your savings.
> Now how they perform relative to inflation over those years is beyond your control. I'll bet there are many here who have been in super (not their own funds) who are disillusioned by fees and poor performance.
> 
> Anyway back to my point.
> Kris didn't have any spare funds then to take advantage of any entrepreneurial opportunities that came his way.
> Lets say he wanted to start or buy a business---no funds all in super.
> Lets say he wanted to take part in the last or any future property Appreciation---cant do no funds all in super.
> Lets say he became a very good trader---no good no funds all in super.
> 
> Thats why its a con.
> This tax saving deludes people into the be all and end all of investment strategies.
> The tragedy is that
> A--they are leaving their future to others.
> B--The cannot take advantage of their capital.
> C--- by the time they realise it its too late.
> 
> Money does unfortunately make money and if you have it countless opportunities present themselves---without it you look on in wonder and sometimes regret---as I did.
> 
> happy to be convinced otherwise.




So what are your suggestions to the million other Australians who does not know ANYTHING about saving/investing for their retirement and does not possess the knowledge / experiences to do so? Do it yourself? But what if these million Australians are too busy with their life to learn about building wealth, or have absolute no interest in such topic? 

All the anti-FP comments that I generally hear usually comes down to two things. I know how to manage my wealth and invest better than the recommendations from FPs. And that the FPs are acting in their own interest for commissions only. 

And for the super part, at least I agree that it is pointless for those who are still relatively young. In fact, the study materials actively discourage such strategies! (yes, it's from the first module as well!) Any FPs who hard sell super products to these young people are definitely acting in their own interest only. So I can't blame those who are pissed off with it.


----------



## tech/a

Temjin said:


> So what are your suggestions to the million other Australians who does not know ANYTHING about saving/investing for their retirement and does not possess the knowledge / experiences to do so? Do it yourself?




Yes absolutely take the time and effort IF you have an interest in your financial future to become experienced enough to take control of your life financially.



> But what if these million Australians are too busy with their life to learn about building wealth,




I would suggest that if they're "Too Busy" Then they either have no interest in future financial security or are locked into the financial merry go round which they actually seek to get off.
Doing the same thing day in day out expecting a DIFFERENT result!



> or have absolute no interest in such topic?




They have no need for the likes of me or an F/P. 



> All the anti-FP comments that I generally hear usually comes down to two things. I know how to manage my wealth and invest better than the recommendations from FPs. And that the FPs are acting in their own interest for commissions only.




Their recommendations are at best mediocre is another
They are so hog tied by possible litigation that they cannot advise outside of a very closed circle even if they could or wanted to.---is another.
They have (in the most part) no practical experience beyond what they learn from Industry experts---



> And for the super part, at least I agree that it is pointless for those who are still relatively young. In fact, the study materials actively discourage such strategies! (yes, it's from the first module as well!) Any FPs who hard sell super products to these young people are definitely acting in their own interest only. So I can't blame those who are pissed off with it.




And the advice for these people is?


----------



## TheRage

Macquack said:


> Not one of you best posts, TheRage.




Why not? Where is your pithy reply. My original point was not to cast everyone with the same brush becasue people are crooks in ever industry including yours Mr Builder. People always talk about Financial planners putting them into Westpoint or Fincorp. Guess what Lawyers and Accountants also got involved in these little treasures. For the record I did not just have a dig at accountants or lawyers I am merely pointing out that all industries have crooks.


----------



## TheRage

Tech, 

I respect your technical charting experience but I think your personal experiences regarding financial planners have clouded your judgement on this one.

Superannuation as Julia said is an investment vehicle. If a planner wants you to make a 100,000 concessional contribution each year to super it is so that you can get a full deduction on this amount and apply it to your taxable income. This would only be relevant if you were older anyway as you would be limited to $50,000 if you were younger. I agree young people should not lock up all of their money in Super but providing legislation is still reasonable into the future you can't beat the tax effectiveness of Super for wealth accumulation. 15% earnings tax, 10% capital gains sounds pretty reasonable to me. Hit age 60 and retire and you can withdraw the whole lot tax free if that is what you want to do. Again a yound person would not build their entire wealth this way for the reasons you have mentioned about access to capital. 

To make the suggestion that everyone in the world should be like you and become financially savy enough to completely control their finances is absolutely ridiculous. If everyone was smart enought to manage their money and the markets were completely effecient then unfortunately you would never make more than what your neighbour made no matter how smart you were because we would all be doing the same thing. I agree for most people becoming a multimillionaire is beyond their reach and no financial planning will ever help this but for others it's not about being millionaires it's about achieving their goals and valuing what is important to them. Did any of your planners ever have a value based conversation with you Tech? Did any of them ask you what is important in your life. Don't tell me it is money becasue money only facilitates what is important. Most people don't even know what they value until they are confronted with it. Some it is God, other's its family, and others it is the ability to travel every year and still retire comfortably. I think good financial planners can assist people with achieving what they see as being valuable and help prepare strategies to achieve this.


----------



## Portfolio

Tech you have some good points but i think you are going too far to make your points heard.......

What could/do I do with that $58k a year surplus?
(1) Buy another excavator to add to the fleet---nett $50/hr average 37hrs a week.

So your advice to a client is keep reinvesting everything into their small business? I agree small businesses can earn higher rates of return than equities or property (passive investments) but money isnt everything to everyone.  At some stage you will have enough that you can sit back and take the returns that are given by the asset classes - property, shares, fixed interest. You wont want to work harder (even though by adding that extra excavator you would make more money).  

(2) Add another $120K to the margin account Even with my tax rate I'll out perform any managed fund.---well 99% of them.

I dont think you believe this....i think you are just sticking the boot in.  If you can outperform 99% of managed funds why dont you forget about excavators and become a fund manager?  Maybe you think you can as you have over the last few years due to the bull market.  Maybe you are comparing your highly risky speculative returns with ASX200 managed funds which arent designed to compete with what you are doing.  You are right in that most fund managers will give  you the index ASX200 or whatever +-5%.  But when you reach the point that you have enough money and are happy with equity like returns they will suit you.  You wont want to keep punting your money on speccy shares.

(3) Use the funds to service a carving up of a 1200 meter house block to 3 400 meter development blocks.Doubling investment in 12 mths with ease.
Even in these "depressed times".

"doubling your investment in 12months with ease".  I dont think you believe this either.  If this were possible why isnt there a listed share that would harness these very attractive returns?  Answer.  The returns wont continue.

(4) Service a duplex development.

??


----------



## Macquack

TheRage said:


> Why not? Where is your pithy reply. My original point was not to cast everyone with the same brush becasue people are crooks in ever industry including yours Mr Builder. People always talk about Financial planners putting them into Westpoint or Fincorp. Guess what Lawyers and Accountants also got involved in these little treasures. For the record I did not just have a dig at accountants or lawyers I am merely pointing out that all industries have crooks.




Get over it Rage, I never called you a crook.

All I said was you want a "big pat on the back". Hardly an insult.


----------



## awg

I sit there at the second interview and go through these and many more looking at these Experts and I get---blank stupid looks.---Financial planners---plan what!

What do I do for super?
I have one investment only.
My busines

##############################

Hi Tech A and others.

How do you feel about Super as an investment, in regard to trading within an SMSF in the pension phase?

No tax at all on capital gains or income, if over 60.

very low tax if over 55, or otherwise entitled.

margin and shorting via CFD.

A very significant increase in return is available under these conditions.

Availability of Capital is also a lot more flexible.

(This is the strategy I am using and developing, so any improvements/criticisms would be welcome)

regards tony


----------



## tech/a

> Tech you have some good points but i think you are going too far to make your points heard.......




True and it is personal experience.
Others maybe very happy.
I'll not post on this topic again.I have nothing more to add.


----------



## robots

hello,

for many super should be looked upon as a savings account only, as it is the "pure" injection of capital that gives the "balance" in 30-40yrs,

but it needs to be tax free for any contribution, get rid of the 15% contribution tax and allow full tax deduction for contribution,

the tax benefit vs. locking away is too close to call

thankyou

robots


----------



## Julia

tech/a said:


> I remember one poster here Kris who placed everything he could get his hands on into super.
> I find this tragic---why.



To use Kris as an example in order to make your point is unreasonable.
We all discouraged him from sinking all his funds (small as they were) into Super at his young age.  

Just because Kris didn't seem to comprehend how foolish it was to tie up everything he had does not mean that Super is of itself "a con" as you put it.

When used appropriately, it's a very tax effective *vehicle*

Others have made good points about how atypical you are, Tech.
A while ago you said retirement "terrified" you. 

You seem to be almost obsessively focused on your business and making more and more money.  

I'd suggest that this is simply not the aspiration of most people.  Most of us want enough money to provide security, the means to live the sort of life we enjoy, and the capacity to perhaps help family and others we care for.
Beyond that, eternally working to make even more money simply seems unnecessary to many people


----------



## awg

I need to vent my violent rage about FPs!!

After paying management fees for some time, after I retired due to serious illness, I used a WRAP fund

now I  have setup my own SMSF.

As I am now much better, I can manage my own affairs easier.

I was paying over $10,000pa for management fees + MERs on the managed investments within my portfolio.

for that, I got nothing but convenience of admin.

As I have become more financially astute, I have been selling down my share/min portfolio at the rate of about 10% per month since December, due to falling markets.

every time I did this, I was met with skepticism.

my story is a long and complicated one, but after getting my SMSF pension finalised, I decided to cash out my WRAP, against advice again, and rollover to my SMSF.

Shortly after I wound up the "safe" mortgage trusts" redemptions were frozen!!

The final indignity, I realized that the tax on the WRAP funds is not completed till February...when this happens, I get a Credit of about $7000.

I emailed the institution I have had my Wrap, with and said " what happens to my credits"...answer YOU LOSE THEM!!

Luckily, I kept a small amount in the wrap to pay my last monthly pension.
Now I am doing a bunch of admin stuffing about to change my pension from monthly to  half yearly so I get my $7000 franking credit.

my suggestion!!!...they said there was nothing i could do to keep it!! 

For F#cks sake, I am so sick of having to be my own financial advisor, but pay for bad/no advice.

I consider myself to be relatively financially sophisticated, compared to the average populace ( not ASFers)...most people are reliant on FP.

Sorry about the long ranting post, I am cranky as hell!!

example of question I could never get proper answer on!

If a Oz share managed Investment is held in a Wrap fund, how is the tax credit paid on a differential basis to each individual taxpayer to reflect their tax rate...ie 0% for super pension: 15% super or low income; 30% average tax: 45% high taxpayer.

In answer to this question, I got various conflicting answers.


ps.. I use low MER cost equities now to replicate Index funds such as STW and AFI, and make sure i get every cent of tax credit, as I have a super pension, this greatly improves the perfomance of my portfolio if utilised correctly


----------



## Julia

awg, when you say you're angry with FP's, do you mean that it was a FP who advised you to invest in the Wrap structure?


----------



## white_goodman

My mate in wisdom trusted all the money that was left by his late dad to a financial advisor... he got a margin call the other day and must front $7,000 to the financial adviser/planner....

"First time its ever happened in 20 years" says the planner


----------



## awg

Julia said:


> awg, when you say you're angry with FP's, do you mean that it was a FP who advised you to invest in the Wrap structure?




Hi Julia,

Obviously it was a FP that advised me to invest in a Wrap, but I am not angry about that all.

They are a convenient product and suitable for many, including myself at that time.

My annoyance stems from the fact that you do not get appropriate advice once you are in the product.

Specifically, as detailed in my post, despite me asking "do you think it would be a good time to sell various asset classes due to specific reasons"...answer "we do not give specific advice...time in the market etc"

Advised against cashing out Mortgage and Property funds (did anyway)...weeks later redemptions frozen.

No advice on possible loss of Franking Credits...only my own research uncovered that.

Incorrect answers given to specific questions.

Kept me in a higher fee paying scheme.

I could give further examples.

It is a lot of work to run a SMSF, especially if it is active in share trading.

bottom line $10,000pa-$600pa = $9400 in my pocket each year, if I live another 30yrs, would be $500,000+(including compound interest)


----------



## awg

actually Julia,(and others),

 I was somewhat conservative with my estimate of figures.

If I saved $9400 on fees per year (very conservative, as it assumes my balance would never rise)

and added that to my account each year.

and compounded that amount at 7%pa tax free (it is tax free pension) per year.

and lived 30 more years (actuarial tables indicate I should)

the difference would actually be $986,079, in my favor.

based soley on the fee saving!

my descendants will no doubt be most pleased.

makes you think doesnt it!...like those Industry Super ads say.

many assumptions are factored in of course.

I use Esuperfund, who charge $600pa flat fee for all audit & tax requirements.

I spend several hours each day studying investment issues, it is my "hobby".

I know you have a SMSF Julia, so you have obviously done yr homework as well.

I chose Esuper cause they are the cheapest, to the consternation of my accountant, who is very good, but charged much more, based on the fact I am relatively young and have a fairly high account balance, the sums are very much in my favor.

I did a risk/return on the whole thing.

it is a proven fact that you live longer when you take a lifetime pension!


----------



## MRC & Co

If you have ever studied the material financial planners do, in order to provide you with advice, you will realise how disgraceful the entire industry is.  They are simply salesmen, wouldn't even call them educated.


----------



## Julia

awg, I wasn't in the least questioning your choices or your thoroughly understandable reasons for the rant, just was curious as to whether a so called licensed financial planner had advised you the Wrap thing was in your best interests.

All I can say is congratulations for having extricated yourself and for having followed through on the tax situation.  Proves once again how much that 'profession' actually cares about the profitability of the client, huh!

I went down the same road for a very short time until I - like you have now done - realised the ride I was on for the benefit of all the people in the commission chain.   Then, the next step on the road of learning was to use a full service broker in the naive assumption that they were, umm, experts about stock picking and had the goal of making money for me!   What a stupid notion!

That was short lived as well, thank goodness.

I'm very happy with the SMSF, though am prepared to pay the extra for sitting down with my accountant rather than using E-super.   Probably not logical or necessary.

I don't find it too much work and like the sense of being in day to day control of what happens.   

I sold my shares in early January.   Being in cash has been good, but with rapidly falling interest rates this strategy will not be viable after the current term deposit reaches term.  So I guess there will have to be a rewrite of the Investment Strategy.


----------



## tech/a

MRC & Co said:


> If you have ever studied the material financial planners do, in order to provide you with advice, you will realise how disgraceful the entire industry is.  They are simply salesmen, wouldn't even call them educated.





My sentiments exactly.

If you cant control your investments *DONT GET INVOLVED.*
That goes for *ANY* investments.

If you dont understand what your doing* LEARN*


----------



## brianwh

AWG

I could have written this almost word for word - and with the same underlying sense of anger and frustration. 

I retired 3 years ago and with FP + Wrap Account fees was paying in excess of $10,000 per year (plus MER). For this I was getting an annual review plus all administrative services. I have subsequently found out that in the industry they call this "set and forget". My request to renegotiate our financial relationship was met with tried and tested patter and the bottom line was they needed this fee structure "to give me the special advantages and accesses provided by their firm". 

By September of this year their advice (and "special advantages and accesses") had seen my capital reduced by more than $200,000 and a number of the funds they had me in were performing below benchmark. In September I set up a SMSF. To the end of October this year, this had saved me from losing another $100,000. I currently hold my capital in forms of interest bearing deposits (although as Julia has noted, I will have to rethink this as interest rates fall). I expect to return to the equity market fairly soon - not trying to predict the bottom but hope to get some quality stocks at good prices. I will be staying out of property for the forseeable future.

My knowledge of the arcane world of finance is fairly unsophisticated but I will be making a concentrated  effort to address this and will stand or fall financially on my own decisions. Just knowing that I have control of my own affairs and that someone who is contributing minimally will no longer be creaming off fat fees will be reward in itself.

PS Have you been able to get an answer to your question about the tax rates on the franking credits AWG?


----------



## Mofra

MRC & Co said:


> If you have ever studied the material financial planners do, in order to provide you with advice, you will realise how disgraceful the entire industry is.  They are simply salesmen, wouldn't even call them educated.



The unfortunate fact of life is that there is a higher focus on compliance than on good advice within the industry. Commissions do play a part in advice; for risk, ease of underwriting is often the determinate factor.

If someone is financially illiterate a financial planner may have some value, however I'd say the majority of people here would be better off forming their own plan, as long as there is at least some measure taken on estate planning & personal insurance.

I've been in the financial industry for some time and have talked to (literally) hundreds of planners - there are a minority that are extremely good at what they do, but most will offer the same advice regardless of who walks through their door.


----------



## Temjin

Mofra said:


> The unfortunate fact of life is that there is a higher focus on compliance than on good advice within the industry. Commissions do play a part in advice; for risk, ease of underwriting is often the determinate factor.
> 
> If someone is financially illiterate a financial planner may have some value, however I'd say the majority of people here would be better off forming their own plan, as long as there is at least some measure taken on estate planning & personal insurance.
> 
> I've been in the financial industry for some time and have talked to (literally) hundreds of planners - there are a minority that are extremely good at what they do, but most will offer the same advice regardless of who walks through their door.




Yep, the focus on "being compliance" is much greater than most of you would think. Professional Indemity insurances cost HEAPS and with the laws around in Australia, one could find a way to sue any FPs who have "given" advises beyond what the "regulations" required them to do. It's difficult to find an unbiased, fee for only service, FP, and who know their stuff. But the fact remains that there are indeed some out there who are extremely knowledgeable and are prolly involved in investing/trading far more than most people here.

Does it sound like I want to become a financial planner. I certainly do because i am more motivated to help others to achieve their financial goals, and I HATE BEING a pure salesman. Hopefully one day, I could advise unconventional investment vehicles such as commodity funds, managed futures, hedge funds and other ETFs. Though I'm not sure if it is "possible" under the current regulation to provide such advises. 

The fact remains that A LARGE MAJORITY of the public are financially illiterate and they would at least be better off than where they are right now by seeing a financial planner who gives "unbiased" advises and help them to manage their budget/debt/risk management. Most people don't even know how to budget properly! 



			
				MRC & Co said:
			
		

> If you have ever studied the material financial planners do, in order to provide you with advice, you will realise how disgraceful the entire industry is. They are simply salesmen, wouldn't even call them educated.




I know MRC. I've done the materials and the "investment" information there are quite "unsophisciated" for the average ASFer here. Most are salesman, but like I said, there are a few rare ones who probably know more than you might think as they could be as passionate about investing/trading as you are. At least I am one of those who are passionate about investing/trading.


----------



## Temjin

This has already been posted in another thread.

http://www.travismorien.com/invest_FAQ/

He is what I call one of the "rarer" financial advisor out there. Just by looking his "recommended reading" list show that he is not the standard "sales FP" guy out there. He even recommends Nassim's and Dr Van Tharp's book.


----------



## MRC & Co

Yep, agreed on the compliance BS.


----------



## awg

PS Have you been able to get an answer to your question about the tax rates on the franking credits AWG?[/QUOTE]


I am waiting by the phone and email to find out how I can save my $7000 worth of Franking credits for 07-08.

They assured me I would have an answer yesterday, after initially saying it would be lost.

That is what made me irate...if I cant save it, there will be a name and shame by me on this forum and other places, of the relevant institutions..I will tell them this, and they will have to fight me administratively as well.

I will not give up my $7k without an enormous sh1tfight...they can sue me if they want!!

as to the question re diferrential tax of MINs, I dont care anymore, as I no longer have any, would have been good to know...hang on, I still have $5000 with BT outside my super...I will email them with my question and see if they will answer


----------



## awg

an update for youse all.

After numerous phone calls and emails, with no help at all from my FP.

I have negotiated direct with Macquarie Bank, so that they will keep my account open until the Franking tax credits are paid, expected to be  February, an amount that should be in excess of $7000.

otherwise this amount would have been lost to me, as I had been told my account would definately be closed.

I would like to point out that my FP was not connected with Macquarie.

I decided to deal with them direct, in a very forceful way, replete with threats of legal action and never ending administrative harrassment + APRA complaints, and slagging on forums, taking up more time than it was worth for them.

I did stay polite though, believe it or not.

I must say they were pretty good, they could tell i meant business, after I explained my previous expertise in managing complaints

today they emailed me ( at my insistence) to say they have found a way to do it.


they even said (verbally) " I should have been advised about this potential problem, thereby preventing it"

I said thanks, I would not have pulled my considerable 6 figure balance, if i had got what i paid for (decent advice).

prior to this they had not been so helpful..example, when my FP was on holidays, and I wanted to sell a Managed investment, I was told I had to wait till he came back!!.

I feel stupid for putting up with this nonsense, its a shame one has to be ultra-assertive to get decent service.

I think it has something to do with the present economic climate and also fear of job loss if poor service is complained about


----------



## mattlaw

For the people who have a SMSF, do you do your own research? If yes do you think you could have foreseen the financial climate we are in at the moment?


----------



## awg

yes I do my own research

yes it was POSSIBLE to foresee a stock price fall, see various ASF posts

but what to do? ( many opinions )

in my case I progressively sold down, as the market fell.

however, i still incurred substantial losses, as I did not cash out in one big hit early on.

i did not go short at all until recently

(now mostly still in cash)

still have problem of what to do when term deposits expire and IR are low

when to move back into market and how much trading


----------



## Wealth Wizard

I would suggest that the level of a planners education and ability to add value to each client would likely vary dramatically from firm to firm. There are of course the shonks of the industry but also some great ones, all the planners where I work are degree qualified (mostly Finance majors) alot are CFP's some have MFin, MEcon etc are passionate about investing and invest heavily themselves. A few guys are right into Trading (myself included) currencies, Futures, CFD's etc also. so its a case by case assessment IMO and alot of planners are comfortable charging based on time spent working the clients strategy/preparing SOA's etc or by commissions if the client prefers, The industry will always get hammered and cursed in a bear market because money is such an emotional issue for many people, so I wont even attempt to rebut the whole "planners are useless" line and will reserve that for when the market starts picking up


----------



## Julia

mattlaw said:


> For the people who have a SMSF, do you do your own research? I



Yes.



> If yes do you think you could have foreseen the financial climate we are in at the moment?



From the market peak in November a year ago, the charts of most of the larger companies were showing a consistent downturn by the beginning of 2008.  Combine this with the increasingly bad news in the financial and general press and, yes, it was imo prudent to preserve capital and get out.
I did this, as did others, in January.

I don't think many even at that stage imagined that it would be as bad as it is, but it seems to me a lot easier to incur a bit of brokerage and (sadly) CGT to be safe.


----------



## TheRage

Temjin don't lose hope about becoming an FP. There are some fantastic parts to the job such as helping people. We are not all salesman and sharks and quite frankly the 0.000005% of the population that ASF represents should not deter you from joining a rapidly restructuring industry. If FP's are all sharks then by Proxy most accountants are sharks because almost all large accounting firms have an FP working for them or some sort of remuneration deal with an FP.  This does not mean that accountants are bad this means that they see the value in having a good FP working with them. 

By the way if we are going to continuously dig at FP's can I have a whinge about recruitment firms that charge 15% fees on the first year's salary in placing a professional. Also how about the realestate agent charging 5% of the sale on a property. My point is that these groups get paid this way they do because they do a lot of work and the job is hard and stressful. Our job is no different but we actually charge less and invariably have more responsibility as we are dealing with peoples life savings everyday. 

To all the salesman financial planners out there it's time to retire. No doubt you probably won't have a choice soon as the market may make this decision for you. To all the good highly qualified Fp's out there keep up the good work in slowly changing the perceptions of our industry and driving it into a profession.


----------



## Temjin

TheRage said:


> Temjin don't lose hope about becoming an FP. There are some fantastic parts to the job such as helping people. We are not all salesman and sharks and quite frankly the 0.000005% of the population that ASF represents should not deter you from joining a rapidly restructuring industry. If FP's are all sharks then by Proxy most accountants are sharks because almost all large accounting firms have an FP working for them or some sort of remuneration deal with an FP. This does not mean that accountants are bad this means that they see the value in having a good FP working with them.
> 
> By the way if we are going to continuously dig at FP's can I have a whinge about recruitment firms that charge 15% fees on the first year's salary in placing a professional. Also how about the realestate agent charging 5% of the sale on a property. My point is that these groups get paid this way they do because they do a lot of work and the job is hard and stressful. Our job is no different but we actually charge less and invariably have more responsibility as we are dealing with peoples life savings everyday.
> 
> To all the salesman financial planners out there it's time to retire. No doubt you probably won't have a choice soon as the market may make this decision for you. To all the good highly qualified Fp's out there keep up the good work in slowly changing the perceptions of our industry and driving it into a profession.




Thanks TheRage, I'm not the type of person who would give up so easily.  

I definitely see a changing perception of the whole FP profession in the longer term and trend toward away from pure commission to a more, unbiased fee for service structure. This is already happening from my understanding but just takes a while. 

Despite all the gloom and doom, and even if there is a global depression coming in with the stock markets being stagnate for a decade, I still see potential in the FP industry. 

Though I need to be realistic at this point of time and take care of my own needs instead of my own wants. Beside, I have other "opportunities" to pursue at this point of time.  But again, I am on the look out to enter the industry as soon as it is possible.


----------



## awg

An update on my post No 112.

I did receive my $6000+ in franking credits.

I must thank Macquarie Bank, they were surprisingly helpful, once they realised I would not go away.

Something of a parallel to Storm, in that my super was in a badged Macquarie product, and they insisted I deal through my financial planner, that being Commonwealth Premium Wealth management.

Only when I moved my investments to SMSF, did they have no choice but to deal directly with my residual account.

I kept every email.

I always gave my sell instructions by email, even after I had verbally instructed.

That way I have a trail, if things go wrong.

The main reason I moved to SMSF, is because my fin planner would give me no advice whatsoever on sell strategies.

Having said that, it is still and awful lot of work managing your SMSF, in particular asst allocation and stock selection, you can spend endless time on, sometimes I wonder if I would have been better to just stay in a basic balanced strategy, and spend less time learning all that is required to manage my investments well, but a 1 to 2% fee is just a killer over 30yrs on a large account.

I must further add, that my planner was very professional in regard to risk management, and I know he would never have been a party to the ridiculous leverage utilised in the case of Storm


----------



## Onlooker

Good evening, everybody

(I'm trying to be very polite after having been booted out of another thread 

I'm in here mainly to obtain different points of view and to follow some logical discussions and in the process learn something from it.  As I am all for SMSFs and all against Financial Planners, this may be a suitable forum (although it would've been nice to have found a thread entirely devoted to SMSFs).

The point I wish to make here at this moment is to suggest that it pays to learn as much as possible for yourself about the administration of a SMSF, to do all the bookwork yourself, and then have the obligatory reporting and audit work done by one of those "mail order shops" who charge you a fixed fee (often as low as $500) regardless of the number of investments and there number of transactions (well, almost, as there is a bit of a scale on really large portfolios).

I had my SMSF with one of those "bucketshops" in the beginning, then thought it would be 'nice' to have somebody locally with whom I could shake hands and have a cup of coffee.  It turned out that that handshake was a bit sticky and for what I paid for that cup of coffee I could have bought a whole Starbuck franchise.  So I tried to extricate myself from that deadly embrace but was fought tooth and nail and had to part with an excessive amount of money to be let off the hook.  Now I'm back to a "bucketshop" at $750 a year and very happy with it.

What are your experiences?


----------



## Onlooker

With regard to how good various professionals are, that really depends to a very large extent on the individuals themselves.  I think we've all met good and bad doctors, good and bad lawyers, good and bad accountants, etc.  Professional associations can only do so much and sometimes are little more than 'self-protection societies.'  And as only the few bad ones usually make it into the news, a whole profession can get tarred with the same brush.  As the saying goes, "99% of lawyers give the 1% a bad name"


----------



## Julia

awg said:


> The main reason I moved to SMSF, is because my fin planner would give me no advice whatsoever on sell strategies.
> 
> Having said that, it is still and awful lot of work managing your SMSF, in particular asst allocation and stock selection, you can spend endless time on, sometimes I wonder if I would have been better to just stay in a basic balanced strategy, and spend less time learning all that is required to manage my investments well, but a 1 to 2% fee is just a killer over 30yrs on a large account.



Stick with it, awg.   You'll find it gets easier.   I'm not sure why you find asset allocation difficult.   It doesn't have to be complicated.  It might not be, um, standard practice, but I allocate my funds to whatever is doing well at the time:  i.e. when the market is rising, buy stocks in the sectors which are showing the most growth.   That's the beauty of a SMSF - you can do whatever you want when you want.

The actual administrative stuff takes almost no time.




Onlooker said:


> Good evening, everybody
> 
> (I'm trying to be very polite after having been booted out of another thread
> 
> I'm in here mainly to obtain different points of view and to follow some logical discussions and in the process learn something from it.  As I am all for SMSFs and all against Financial Planners, this may be a suitable forum (although it would've been nice to have found a thread entirely devoted to SMSFs).



There are several threads discussing SMSF's.





> The point I wish to make here at this moment is to suggest that it pays to learn as much as possible for yourself about the administration of a SMSF, to do all the bookwork yourself, and then have the obligatory reporting and audit work done by one of those "mail order shops" who charge you a fixed fee (often as low as $500) regardless of the number of investments and there number of transactions (well, almost, as there is a bit of a scale on really large portfolios).



I agree about doing the basic record keeping, but I like having an accountant.
I don't doubt that some of the mail order entities are OK, but I don't consider paying around $2000 p.a. for the tax return and audit plus any ongoing communications throughout the year with someone I like and trust to be unreasonable.
Just a matter of personal taste, I suppose.

I've also had the experience of a shonky accountant.  She is about to appear before he Disciplinary Committee of CPA Australia as a result of a formal complaint I lodged.
This was something I'd never want to do again, and it would have been easier to walk away but there's just too much of this and consequently they keep up their dodgy behaviour.


----------



## Onlooker

I don't find my SMSF's administration excessive or demanding.  I keep a minute book of all major decisions and reviews taken, and a spreadsheet of all transactions as I go along, and that's that.  Come 30 June, I print the lot out for easy transcription into the requisite reports.  And there's another thing that I have noticed is that psychologically I have developed quite a different attitude to the investments in my SMSF as opposed to those outside.  I seem to apply a more disciplined and 'long-term' approach to those inside the SMSF.  I took advantage of all the accelerated contributions in recent years, went into pension phase last financial year, and now enjoy not only tax freedom but also get all those beautiful franking credits back which is quite a nice feeling 

There was quite a rush on in the accounting profession when this whole SMSF-business took off and many an inexperienced chap set himself up in this specialised field.  I had to pull up my first accountant when he wanted to declare 15% contribution tax on *all* my contributions, not just the ones I had declared as concessional deductions in my personal return.  It took me several emails before he came back with this reply
QUOTE
Thanks for that. I have read the legislation. I think you are right. Deepest apologies, my interpretation of the law was incorrect s274 which says that 15% but then there is this 82AAT which excludes it from being tax (only the deductible amount will be taxed) – the 82 AAT notice thing. Really appreciate that, now I have to go fix up a couple of returns. Really, thank you for this. Really appreciate it. Owe you one. I will forward you an amended return for your signature today.
UNQUOTE


----------



## awg

Julia said:


> I'm not sure why you find asset allocation difficult.   It doesn't have to be complicated.  It might not be, um, standard practice, but I allocate my funds to whatever is doing well at the time:  i.e. when the market is rising, buy stocks in the sectors which are showing the most growth.






So did you get a good piece of the 14% return on bonds this year?

What about your gold allocation?

30%+ on stocks last 3 months.

Cash rates low

Depends where you had the assets allocated, if you make those decisions well, then you can outperform, depending upon your benchmarks


----------



## Julia

awg said:


> So did you get a good piece of the 14% return on bonds this year?
> 
> What about your gold allocation?
> 
> 30%+ on stocks last 3 months.
> 
> Cash rates low
> 
> Depends where you had the assets allocated, if you make those decisions well, then you can outperform, depending upon your benchmarks




awg, what I said was:



> It might not be, um, standard practice, but I allocate my funds to whatever is doing well at the time: i.e. when the market is rising, buy stocks in the sectors which are showing the most growth




i.e. I buy *shares* in what sectors of the *share market* are rising.

I don't want bonds and I don't want gold.
That's why I suggested I didn't subscribe for myself to 'standard practice' of always being diversified across every asset class.
If you do want to do that, then I wish you every success.  I prefer to stick to what I know well and understand.


----------



## wayneL

An interesting development over here in The Old Dart:

http://www.timesonline.co.uk/tol/money/investment/article6576639.ece



> The chief City watchdog today confirmed it was set to ban all commission-based advice in a move that will sound the death-knell for the old style adviser industry.
> 
> The proposals will result in dramatic changes for both advisers and product providers as the Financial Services Authority (FSA) attempts to repair the damage caused to the industry by successive episodes of commission-driven mis-selling..............


----------



## tech/a

> The chief City watchdog today confirmed it was set to ban all commission-based advice in a move that will sound the death-knell for the old style adviser industry.
> 
> The proposals will result in dramatic changes for both advisers and product providers as the Financial Services Authority (FSA) attempts to repair the damage caused to the industry by successive episodes of commission-driven mis-selling..............




Now that would alter the face of the industry.
Would cut down the number of "Advisors" dramatically.


----------



## Krusty the Klown

tech/a said:


> Now that would alter the face of the industry.
> Would cut down the number of "Advisors" dramatically.




Do you really think so?

Won't they all just change to fee for service for the same amount as the lost commission?


----------



## Julia

I think there will be resistance from many people to paying that upfront fee.

That's why there has been the predominance of clients going for the commission based fees to date, rather than being prepared to pay upfront for so called unbiased advice.


----------



## Krusty the Klown

Yes, I suppose if people don't want to pay upfront, or can't afford to, it will impact on advisers revenue, therefore less advisers.


----------



## Temjin

I thought I would update this thread with this latest development. (from tech/a last post) 

http://www.fpa.asn.au/FPA_LatestNews.aspx?EventGroup=1&EventItem=268



> FPA Board approves remuneration policy
> 
> 23 Oct 2009
> 
> The Financial Planning Association (FPA) Board has approved the FPA’s remuneration policy to move away from commission-based fees for financial planning advice, by July 1, 2012.
> 
> FPA CEO, Jo-Anne Bloch, said that in approving the remuneration policy, the FPA Board applauded the members and the community for their participation in a robust debate about the issues.
> 
> “The FPA is committed to transparency and robust consumer protection and we are now looking forward to the implementation,” Ms Bloch said.
> 
> “This is an historic decision by the FPA, and shows how our members lead the way in the financial services sector,” Ms Bloch said.
> 
> “Our job is to ensure our members continue to put the interests of their clients first and by putting this remuneration policy in place, the FPA is insuring consumers receive advice that is free from real or perceived conflict, as well as ensuring the long term viability of the profession.”
> 
> The FPA received over 250 responses to its consultation paper “Financial Planner Remuneration” released in May this year, which assisted the Board in developing the revised policy.
> 
> “Members on both sides of the debate have made substantive contributions that have enabled the FPA to finalise the policy and ensure efficient implementation of these principles,” Ms Bloch said.
> 
> The FPA said that risk products are not within the ambit of this policy at this point in time, and neither are rebates and related payments, which are product directed payments to Australian Financial Services Licensees.
> 
> However, it needs to be clearly stated that the FPA wants to encourage the entire Financial Services industry, product providers and financial planners alike, to progress towards a transparent and appropriately labelled environment where clients can benefit from professional and unbiased advice.
> 
> The FPA has therefore established a member working group to progress appropriate remuneration principles for risk products, and a working group to determine how corporate superannuation will be implemented. Both will report to the FPA by early 2010.
> 
> Whilst many FPA members already have transitioned to client directed fee payments, the FPA has also established a transition committee to assist members with guidelines, tools and information to ensure a smooth transition for every practice.
> 
> “*FPA members will be required to transition away from commission-based remuneration by 2012 but the FPA wants to encourage members to adopt these remuneration practices as soon as their business is ready*,” Ms Bloch said.






> ‘AMP has told fund managers if they want to be on the group's 1,600-strong financial planning network's approved product list (APL), their products must not include any commissions.’
> Financial Standard, 27 October 2009




This is a quite a major shift from the traditional remuneration structure of financial planners, in which the majority are still on commission based. 

Perhaps this will bring back some confidence from the consumers on receiving unbiased advises. 

The next thing is to get rid of those "approved product list" and move toward no-limitation on what financial planners can or cannot recommend. 

http://www.finsia.com/eventPDF/PD1_Financial Planning_Q27_Bris.pdf

for a seminar on this latest event.



> Take part in a discussion on putting value on advice and creating your worth, taking responsibility for raising standards and avoiding further disasters such as the collapse of Storm and Great Southern.




Maybe it will or maybe it wouldn't as mistakes would continue to be made and greed would continue to exist, but certainly it is a step toward the right way.


----------



## Julia

One of The Australian's journalists has, in four days, become a 'Government certified, nationally accredited' financial adviser with a 'diploma of financial planning'.

"No exams, the course completed entirely online and 'open book' - and with no requirement for a high school certificate (or even a passing grade in primary school for that matter) - and I'm a fully certified financial planner."




> Anthony Klan, government-certified, ‘nationally accredited’, financial adviser. Source: TheAustralian
> 
> HAVE a spare few thousand to *invest? Better yet, $10,000, $100,000 — more?
> 
> Need your financial future mapped out and advice on where to invest your nest egg (plus all the fees I can extract along the way of course)? Roll up, roll up. I’m a *government-certified, “nationally accredited”, financial adviser with a “diploma of financial planning”.
> 
> No exams, the course completed entirely online and “open-book” — and with no requirement for a high school certificate (or even a passing grade in primary school for that matter) — and I’m a fully certified financial planner.
> 
> I have met all the education *requirements set by corporate watchdog the Australian Securities & Investments Commission to steer the fortunes of Australians seeking professional help. And all in the equivalent of four days’ work.
> 
> The diploma cost $1425 (more than double, $2950, if you sign up to a handful of face-to-face workshops). The $1425 includes “both personal and general advice”, a distinction that has chewed up its fair share of parliamentary and media time this year.
> 
> But wait, there’s more.
> 
> For an extra $175 — and “an extra 30-40 minutes of reading time”, I am told by the education provider — I could also become a provider of self-managed super*annuation fund advice.
> 
> The government and ASIC have long expressed concerns about widespread future problems with the rapidly growing SMSF sector.
> 
> I’m now also a fully certified provider of SMSF advice.
> 
> QUIZ: Can you answer questions from the Diploma of Financial Planning Course?
> 
> Both the financial planning and SMSF education requirements are set by ASIC under its so-called “RG146” guidelines — the providers follow suit and create courses to meet the requirements.
> 
> ASIC has been well aware of the woeful standards set by it under RG146 for many years — and has been promising an *improvement for almost as long, but still nothing concrete has *happened.
> 
> This week, in its second submission to the financial services inquiry, the regulator suggested improving the training of financial planners.
> 
> But it has made no suggestions as to how it will improve its own embarrassingly inadequate requirements, only suggesting a *“national exam be set”.
> 
> After many years of intense pressure from consumer advocates, ASIC this week recommended advisers be required to hold a university degree.
> 
> But it has conspicuously fallen short of calls for financial planners to at least hold “relevant” degrees, such as in law, accounting or *economics, or to state what type of degree be required, or how it will handle the many thousands of *financial planners operating *nationwide without degrees.
> 
> Financial planners/advisers (the terms are interchangeable) have been involved in almost every major corporate collapse of the past decade.
> 
> Westpoint, Storm Financial, Fincorp, Australian Capital Reserve, Banksia Securities, MFS, City Pacific, Prime Trust, Great Southern, Timbercorp and scores of other collapsed companies all relied heavily on raising money via financial *planners.
> 
> The Association of Independently Owned Financial Professionals estimates “product failure, impaired structures and frozen funds” have exceeded $37 billion since 2005.
> 
> There have been countless hours of hearings, investigations and Senate inquiries with thousands of submissions, the most *recent the Senate inquiry into ASIC over the Commonwealth Bank financial planning debacle.
> 
> Having covered collapsed and collapsing companies for most of the past 10 years, I have interviewed dozens (probably hundreds) of heartbroken investors and retirees who have lost most or all of their life savings — all *because of advice they received from their financial planner.
> 
> ASIC chairman Greg Medcraft says one in five Australians visit fin*ancial planners and that he is surprised the figure is so low. He should be amazed it remains so high.
> 
> At the heart of the problem is the chasm between what the public expects when they visit a financial planner and what they get.
> 
> A devastated elderly couple I interviewed, both retired doctors, had lost most of their life savings after being advised to use products, which have since failed, by their Brisbane *financial adviser.
> 
> “We’re both professionals. When you need health advice you see a doctor, when you need legal advice you see a lawyer, when we needed investment advice (we) went to a financial planner,” said the wife, who now suffers severe depression.
> 
> “We had no idea, it’s been devastating.” Or Christopher Cole, who sold his New Zealand home and immigrated to Australia. He sought advice from a Gold Coast-based financial planner on where to park the $600,000 proceeds from the sale of his house while he looked for a new home to buy. The adviser placed the whole amount in the MFS Prime Income Fund, which collapsed months later.
> 
> “I was going to buy a house with it but now I can’t afford to and I’m living in a caravan,’’ Mr Cole said. “I did exactly what you’re not supposed to do and invested it all in the one place, but the planner said it was a good idea.”
> 
> Lawyers and accountants require solid university degrees, which are difficult, comprehensive and take years to complete — in additional to further qualifications regularly required.
> 
> By contrast, the barriers to entry for financial planners are comparatively non-existent. The costs of ruining a reputation in *either the law or accounting sector are generally huge. But in financial planning, where obtaining a licence can be done with a week or two’s work, the costs of walking away if things go awry are minimal. Not that crooked planners regularly do.
> 
> This week in its submission ASIC again raised concerns over its lack of adequate powers to ban financial planners, which led to “phoenixing” problems, where *financial adviser companies were banned only to reappear under a new name.
> 
> I have been attacked by sections of the industry — in some cases with legal threats flying — for suggesting the nation’s financial planning education standards were sub-par. There was only one definitive way to prove it.
> 
> I Google financial planning education. I decide to give Integrity Education Group a miss — its website told me its Diploma of *Financial planning “provides anyone” seeking to become an adviser with the necessary compliance “to beomce (sic) ASIC registered as an Authoprised (sic) Represetnative (sic)”.
> 
> Instead, I approach the Monarch Institute.
> 
> I’m told of the price of the *diploma of financial planning — and the $175 SMSF offer.
> 
> I initially declined the SMSF component thinking I may be overreaching — I’m still not certain as to exactly how much work the planning course will take. Most of the websites I visit avoid the issue of completion time required, but most of those that do say the course should take *between six and 12 months. One site that does mention time states: “Course Duration: 12 months *(earlier completion is possible based on individual student capabilities)”.
> 
> It’s suggested by a Monarch *Institute representative, via email, I should take up the SMSF offer.
> 
> “I want to let you know that the inclusion of the SMSF to your *diploma of financial planning will only be an extra 5 units of competency that goes hand in hand with module 3 of superannuation, which is around 30-40 minutes of reading time,” the representative tells me.
> 
> The course reading materials come in four modules: foundations of financial planning; investments; superannuation & retire*-ment planning (including SMSF); and insurance. I’m provided with an online assessment portal. My assessment is to comprise four sets of multiple choice questions (one for each module, with the number of questions ranging from 18 to 46) and a series of short-answer questions for each of the four modules.
> 
> I’m told all assessment is “open book”, there are no time limits. I can sit the assessment wherever I like. I can have three attempts at each of the multiple choice sets (with a pass mark of 70 per cent). If I require more attempts I can contact the institute.
> 
> I cut no corners; I diligently read all the materials, fill out the multiple choice questions and the short answer questions.
> 
> During 34 hours of work I complete all the requirements of the course. This did not occur in one sitting, it was several months between signing up for the course and submitting all my assessment materials. As a working journalist I had other duties and the prospect of taking a week’s annual leave to conduct the course was too grim.
> 
> But regardless, I keep records of all my time working on the course. A few part days here and there and the odd full day takes me to nine days reading the material and answering questions. In total, and conservatively, 34 hours’ work. Four full days.
> 
> (A well known and very well qualified Sydney financier is known for stating he could knock off the course in a “lunch time”. While he’s very much on the right track I challenge him to this, though I am unaware of the length of his lunches.)
> 
> I score between 90 per cent and 100 per cent for the four series of multiple choice tests and 100 per cent (they are either pass or fail) for each of the four sets of short answer questions.
> 
> “Sensational! — You have shown an in-depth understanding of this material, and have achieved an excellent result,” I am told. To be fair, I hold a university degree in commerce and have been writing about financial matters for years, so I should score well. But regardless, anyone failing this *diploma should not receive a *licence to handle stationery, much less someone’s financial future.
> 
> For comparison, the course requires roughly the same amount of work as half, or less, of a first-year economics 101 subject, but without all the nasty assessments and studying. (It is also fair to note the issue here is not with Monarch itself. For what it was, the information was well presented. But the key issue is in the “for what it was”; the content required — or desperate lack thereof — to meet the RG146 compliance set by ASIC.) “Monarch supports higher education requirements to meet RG146 guidelines and supports the idea of mandating degree qualifications in preference to *diploma or advanced diploma courses,” a Monarch spokesman said.
> 
> My certificates (I’m now also qualified to provide SMSF advice after all) arrive in the mail. I have completed a full 22 “units of competency”, my certificates beam.
> 
> The only thing between me and setting up shop to the general public now is that under ASIC regulations, financial planners must operate as “authorised representatives” under an Australian *Financial Services Licence holder.
> 
> Re-enter Google.
> 
> Scores of providers show up.
> 
> I contact InterPrac. I’m told the process of becoming an authorised representative is relatively simple. I need to have completed my diploma of financial planning and have a police check run. The whole process should take less than two weeks, I’m told.
> 
> I am to receive 85 per cent of all income I make, with InterPrac receiving the rest, subject to InterPrac receiving a minimum fee of $375 a fortnight. (At the risk of running up more costs, potentially — and still having not been brave enough to hand in an expense claim for my diploma — I skip this final stage).
> 
> Under the arrangement the proportion of income kept by the financial planner gradually steps up to 95 per cent of all income made by the planner once they are earning $600,000 a year or more.
> 
> An InterPrac manager tells me I will be able to recommend about 90 per cent of the investment products in the nation. All products that InterPrac authorised representatives are allowed to sell must be given a tick of approval by a research house.
> 
> While this adds a gatekeeping layer, the data provided by many research houses has been criticised by sectors of the industry.
> 
> The chief executive of the *Association of Independently Owned Financial Professionals, Peter Johnston, said he believed the conflict of interest of product providers funding research was the “No 1” problem facing the *financial planning industry.
> 
> “Conflicted research is one of the key reasons we have $37.3bn in frozen, impaired or lost funds,” Mr Johnston says.
> 
> Regarding the RG146 requirements for the diploma of financial planning, Mr Johnston was concise: “We think they are pathetic”.
> 
> Mark Rantall, chief executive of the Financial Planning Association of Australia — which has long been pushing for better education in the sector — is equally dismissive of my new pieces of paper. Of the 34 hours spent *acquiring them?
> 
> “That long? You must have failed a few,” he jokes.
> 
> And as for ASIC’s mooted *financial planners’ “national exam”: I look forward to sitting it and letting you know how it all goes.
> 
> Do you know more? klana@theaustralian.com.au



Hope this isn't a copyright problem.
(The Weekend Australian, August 30 - 31 2014)


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## tech/a

This is absolutely disgusting

What a joke the financial planning fraternity is.

I have one rule and I think it's one of yours Julia

*If I can't control it I won't do it!*

Doesn't mean I'll eliminate risk but I won't place myself in a situation where I could face ruin.

How totally devastating for those who lose everything through commission based novices.


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## Julia

The general public have absolutely no idea.
And what is ASIC doing about it?   Nothing at all, it appears.

Some sample questions which I'm sure anyone here could answer without even seeing the 'education' material.


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## Panaman

Little surprise that so many ordinary people take charge of there own investment and Superannuation these days, takes time and effort but the longer I do it and the more I read and learn about the financial advisory industry the more im relieved and happy I went out on my own.

It really is a mine field out there, even the big banks cannot be trusted if recent reports about CBA and Macquarie are true.


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## tech/a

And correct answers to these questions will put you in a position to increase a clients funds.

Every financial advisor I've met needs all the help I can give them.
3 of the five I know are living in oceans of debt!

More interested in portraying an image than delivering content.


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## PinguPingu

Gee, wish I had known about this education provider before I started my DFP! (kidding) I'm doing it through Kaplan and I need to do both a 60 question exam and a statement of advice assignment for each module (4 in total to meet minimum for RG146), the damn assignment thing is 60 pages long. Amazingly, my econ major didn't count according to ASIC but crap providers like the one the journalists completed actually do - who's protecting who here?


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## Hodgie

I do not disagree that the requirement to become RG146 compliant is too easy.

However, this journalist already completed a commerce degree, I would say that most of the content in the diploma material would have already been known to him so the time taken is no surprise whatsoever. I was in the exact same boat.

I did it through Kaplan like Reaperman has mentioned, admittedly it took a little longer than 34 hours but as he has said we had to prepare several advice documents which were quite lengthy and time consuming. In terms of actual study though, the time spent was very minimal because most of what I needed to know was known from the Commerce degree (same as this journalist).

It really is up to the dealer group to screen the planners they are allowing to provide advice under their license. I know that dealer groups will not accept qualifications from certain organisations.

If they want to let any joker off the street come into their business with zero practical experience than they will get destroyed with complaints, FOS (Financial Ombudsmen Service) will make them compensate the clients they have lost money for (if in fact the advice was inappropriate) and the company will not survive. These types of business models are not sustainable.

When a client has clearly been mislead or provided with inappropriate advice for their circumstances and they can show this to the financial Ombudsmen, than they will have to compensate the clients for their loss as long as the dealer group is solvent. This is why dealer groups full of bad planners will go insolvent.

It's like in any job, just because someone has a qualification you don't just let them start running a muck on their own. If you respect your own business and your clients they should undergo extensive training before you let them face to face with anyone. They should be mentored for a period, sit in on meeting, learn the business. Than when they do start providing advice the dealer group should be pre vetting everything they do until they are happy that what they are doing is right for the client. It's the licensee's own fault if they let someone provide advice to clients straight after getting the diploma.

I do understand that there are a lot of rogue advisers out there which have caused a lot of heartache and the government is doing less than it could to stop it. This is why as a holder of an Australian Financial Services License the dealer groups need to monitor their own advisers closely if they want to remain profitable. They are heavily in the spotlight now, if they do not do the right thing they will lose their license. 

That's my opinion of the industry anyway.


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## VSntchr

Julia said:


> The general public have absolutely no idea.
> And what is ASIC doing about it?   Nothing at all, it appears.
> 
> Some sample questions which I'm sure anyone here could answer without even seeing the 'education' material.




If you think this is the reality then I am afraid you've been swept up in media hype. Not that I am here to bat for advisers, I certainly have major issues with the industry - but that picture does not portray anything close to the reality for what it takes to become a qualified advisor...at least in my experience.


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## tech/a

VSntchr said:


> If you think this is the reality then I am afraid you've been swept up in media hype. Not that I am here to bat for advisers, I certainly have major issues with the industry - but that picture does not portray anything close to the reality for what it takes to become a qualified advisor...at least in my experience.




Most are not qualified they hide behind licencing given to their dealer principals --- and as such are only able to sell their products and remain compliant to the conditions of coming under the umbrella of that licence.

They do these risk evaluation models which are just plane rubbish and charge $500-$1000 for the privilege. Its nothing more than you disclosing your financial position now and where you'd like to be---you can do that over coffee for $7

Then your shoveled into a fund which gives them the best return on commission and once a year your charged $500- $1000 to get the results and be advised if there is a more highly paid commissioned fund you should be transferred into.

Ask about Property and you get a blank look---No commission.
Ask about investing in a few stocks and Blank looks -- no commission.
Ask about Life insurance and Wage protection and you'll have to sit through the spiel at $500 a shot.
Most everything else your going to have to pay to sit and listen to industry jargon while they try and fit you into a commissioned product of some sort which will answer your question.

One year I tried 3 of these guys out 
2 I knew and 1 I didn't I paid $1000 + GST each for them to advise me on how I should set myself up for retirement.---Perhaps they knew something I didn't or I wasn't doing things as efficiently as perhaps I could.

*Not 1*
Talked about passive income (I have 2 streams not fully utilized and one in the wings ready to be un leashed when I retire/semi retire).

Everyone of them wanted me with (at that time 4 yrs ago) $50K in a managed super fund and the same for my Paid wife.(from the Company). Happy days they had commission cheques well spent.

My response was to continue with my own SMSF.---Couldn't see and still cant see any benefit what so ever.
Plus I'm not going to place my eggs in a fund that has a even a slight chance of going broke.
I can do that myself!


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## VSntchr

tech/a said:


> Most are not qualified they hide behind licencing given to their dealer principals --- and as such are only able to sell their products and remain compliant to the conditions of coming under the umbrella of that licence.
> 
> They do these risk evaluation models which are just plane rubbish and charge $500-$1000 for the privilege. Its nothing more than you disclosing your financial position now and where you'd like to be---you can do that over coffee for $7
> 
> Then your shoveled into a fund which gives them the best return on commission and once a year your charged $500- $1000 to get the results and be advised if there is a more highly paid commissioned fund you should be transferred into.
> 
> Ask about Property and you get a blank look---No commission.
> Ask about investing in a few stocks and Blank looks -- no commission.
> Ask about Life insurance and Wage protection and you'll have to sit through the spiel at $500 a shot.
> Most everything else your going to have to pay to sit and listen to industry jargon while they try and fit you into a commissioned product of some sort which will answer your question.
> 
> One year I tried 3 of these guys out
> 2 I knew and 1 I didn't I paid $1000 + GST each for them to advise me on how I should set myself up for retirement.---Perhaps they knew something I didn't or I wasn't doing things as efficiently as perhaps I could.
> 
> *Not 1*
> Talked about passive income (I have 2 streams not fully utilized and one in the wings ready to be un leashed when I retire/semi retire).
> 
> Everyone of them wanted me with (at that time 4 yrs ago) $50K in a managed super fund and the same for my Paid wife.(from the Company). Happy days they had commission cheques well spent.
> 
> My response was to continue with my own SMSF.---Couldn't see and still cant see any benefit what so ever.
> Plus I'm not going to place my eggs in a fund that has a even a slight chance of going broke.
> I can do that myself!




Tech/a - like I said, I share your concerns with regard to the way advice is administered and paid for. 
As for what it takes these days to become a "qualified" FP is vastly different to the couple of questions alluded to in the picture above.
As for the fat-cats which snuck in to these dealer groups in the past, this loophole is closing and any new entrants (at least with the bigger groups) are forced to much higher standards than ex-fridge salesmen.

Im in agreement with Hodgie on the fact that of course there are crappy advisers, just like there are crappy doctors who charge excessively to google your symptoms and push their scripts that they too get kickbacks from (sound familiar)...but there are also good advisers out there!


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## tech/a

VSntchr said:


> Tech/a - like I said, I share your concerns with regard to the way advice is administered and paid for.
> As for what it takes these days to become a "qualified" FP is vastly different to the couple of questions alluded to in the picture above.
> As for the fat-cats which snuck in to these dealer groups in the past, this loophole is closing and any new entrants (at least with the bigger groups) are forced to much higher standards than ex-fridge salesmen.
> 
> Im in agreement with Hodgie on the fact that of course there are crappy advisers, just like there are crappy doctors who charge excessively to google your symptoms and push their scripts that they too get kickbacks from (sound familiar)...but there are also good advisers out there!




Yes I do know of 2
But like Julia I have a disdain for the profession.
Point taken that this isn't the only profession where it occurs.

However it is a profession full of wanna be's advising those who have achieved!
If they cant look after their own affairs how on earth are they going to look after ours.

Example.
One genius I know of leased a convertible for his wife-- through the company---maximum residual---(Read I cant afford the payments)---instead of to zero ---( Read I want maximum tax deduction on interest).
Wife leaves---gives back car---cars value half of the residual value owing.

And they want to look after others financial affairs!


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## Sir Osisofliver

You know Tech...that was really nice to read 

Here I'll show you why....



tech/a said:


> Most are not qualified they hide behind licencing given to their dealer principals --- and as such are only able to sell their products and remain compliant to the conditions of coming under the umbrella of that licence.
> 
> They do these risk evaluation models which are just plane rubbish and charge $500-$1000 for the privilege. Its nothing more than you disclosing your financial position now and where you'd like to be---you can do that over coffee for $7
> 
> Then your shoveled into a fund which gives them the best return on commission and once a year your charged $500- $1000 to get the results and be advised if there is a more highly paid commissioned fund you should be transferred into.




Managed funds are icky. Most should be aware that is my view, it's also the view of the company I work for. The only kind of "fund" product on our APL is an ETF...and only for use in very limited circumstances where the funds are insufficient for our normal investing activities. Otherwise we invest directly in a range of asset classes on behalf of clients. Ownership and control rests with the client.







> Ask about Property and you get a blank look---No commission.




We purchase Residential and Commercial (we charge fees)







> Ask about investing in a few stocks and Blank looks -- no commission.



It's what we do...and do it well.....we charge fees associated with this activity.







> Ask about Life insurance and Wage protection and you'll have to sit through the spiel at $500 a shot.



If we think you need Insurance we recommend you to a specialist at "Mates Rates". Risk is only on our AFSL so we can incorporate it into planning activities, not sell insurance.


> Most everything else your going to have to pay to sit and listen to industry jargon while they try and fit you into a commissioned product of some sort which will answer your question.




We do a fair bit of education with our clients so they understand what is being recommended.







> One year I tried 3 of these guys out
> 2 I knew and 1 I didn't I paid $1000 + GST each for them to advise me on how I should set myself up for retirement.---Perhaps they knew something I didn't or I wasn't doing things as efficiently as perhaps I could.




You'd be charged a fair bit more than that depending upon the complexity of the advice required...That said you get some free time for a chat and if we can't help you....no charge.







> *Not 1*
> Talked about passive income (I have 2 streams not fully utilized and one in the wings ready to be un leashed when I retire/semi retire).
> 
> Everyone of them wanted me with (at that time 4 yrs ago) $50K in a managed super fund and the same for my Paid wife.(from the Company). Happy days they had commission cheques well spent.
> 
> My response was to continue with my own SMSF.---Couldn't see and still cant see any benefit what so ever.
> Plus I'm not going to place my eggs in a fund that has a even a slight chance of going broke.
> I can do that myself!




We usually encourage clients to use SMSF structures, if applicable.

Ok in my journey in the financial world...I started out as a great many do in the industry....out of a genuine desire to help people. It was a rude shock to find out that...yes, to a large degree, I was a salesperson first and an Advisor second. This however is *totally the fault of the licensee.* (as you can see above I don't work for that kind of licensee any more).The Licensees are the gatekeeper for what is allowed and what is not allowed and how the business is run. 

As for Planners...RG146 - is just a piece of paper. It's a very generic piece of paper as well...and it needs to be because the licensee will then need to educate the Planner into "Their way of doing things".  I have to say...it's been a challenge at the firm to find* experienced* planners, because they are firmly rooted into the pre-existing commission based model. Either they don't like being paid a salary, or they tend to think they can rest on their laurels and not actually work for the salary. 

Before an Advisor however is allowed any where near a client, they have to meet all our internal requirements...which isn't just a couple of Kaplan CPD articles a month.

I guess that makes me and the company...different to most of what is out there.

Cheers

Sir O


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## VSntchr

tech/a said:


> However it is a profession full of wanna be's advising those who have achieved!
> If they cant look after their own affairs how on earth are they going to look after ours.




Good point Tech/A and it's something that is applicable across a wide range of industries, again healthcare comes to mind.
Here's a good video saying a similar thing (and an excuse for a bit of a chuckle..)


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## Julia

VSntchr said:


> If you think this is the reality then I am afraid you've been swept up in media hype. Not that I am here to bat for advisers, I certainly have major issues with the industry - but that picture does not portray anything close to the reality for what it takes to become a qualified advisor...at least in my experience.



And if you think my understanding of the industry is confined to a single article in a paper, then you are making an illogical and uninformed judgement.

I've known many financial planners, several in love with the commission model, a few exactly as Sir O has described himself.  Others posting here also. 

Are you contradicting what the journalist has said?  That the questions he quoted do not actually appear in the test?   That the test is not open book, multiple choice?   If you are, then you should take it up with the journalist.

Hodgie's point about existing degrees is, of course, well made and the rest of his post also to the point.

I stand by saying that ASIC is not doing what it should be to protect people from self-interested 'advisers'.
I've still not recovered from hearing that legislation was to be enacted to ensure advisers acted in the best interests of the client, being of the apparently naive belief that that would be a given.  

Mostly I'm just surprised that so few people take the time and trouble to become financially literate.  It's not that hard, but so many otherwise intelligent and well educated people just seem to allow their eyes to glaze over when it comes to even basic financial management.

I'm 100% with Tech/A.  No financial adviser is going to have your interests at heart as much as you will yourself.
That's absolutely not to say there are not good, competent people available.  But for much of the public, they don't know what they don't know (to paraphrase Mr Rumsfeld), and as we continually see, are vulnerable to being sucked into not just outright scams but just poor advice.

No one is saying the whole industry is rotten.  Of course not.  The purpose of the article, and the purpose of my posting it, is to indicate that it is apparently* possible* to acquire a piece of paper describing the holder as a fully qualified financial planner, with fairly minimal effort.


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## tech/a

> No one is saying the whole industry is rotten. Of course not. The purpose of the article, and the purpose of my posting it, is to indicate that it is apparently possible to acquire a piece of paper describing the holder as a fully qualified financial planner, with fairly minimal effort.




Its not limited to the Financial arena.

In the Building Industry you can have a restricted licence and construct structures worth Millions yet cannot build a house worth $250K because you don't have a full builders licence.
You can however build what you like without a licence provided its for your own use and not for resale.
If however in a few years you put it on the open market---who cares!

Bureaucrats


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## Antoinette32

Julia said:


> And if you think my understanding of the industry is confined to a single article in a paper, then you are making an illogical and uninformed judgement.
> 
> I've known many financial planners, several in love with the commission model, a few exactly as Sir O has described himself.  Others posting here also.
> 
> Are you contradicting what the journalist has said?  That the questions he quoted do not actually appear in the test?   That the test is not open book, multiple choice?   If you are, then you should take it up with the journalist.
> 
> Hodgie's point about existing degrees is, of course, well made and the rest of his post also to the point.
> 
> I stand by saying that ASIC is not doing what it should be to protect people from self-interested 'advisers'.
> I've still not recovered from hearing that legislation was to be enacted to ensure advisers acted in the best interests of the client, being of the apparently naive belief that that would be a given.
> 
> Mostly I'm just surprised that so few people take the time and trouble to become financially literate.  It's not that hard, but so many otherwise intelligent and well educated people just seem to allow their eyes to glaze over when it comes to even basic financial management.
> 
> I'm 100% with Tech/A.  No financial adviser is going to have your interests at heart as much as you will yourself.
> That's absolutely not to say there are not good, competent people available.  But for much of the public, they don't know what they don't know (to paraphrase Mr Rumsfeld), and as we continually see, are vulnerable to being sucked into not just outright scams but just poor advice.
> 
> No one is saying the whole industry is rotten.  Of course not.  The purpose of the article, and the purpose of my posting it, is to indicate that it is apparently* possible* to acquire a piece of paper describing the holder as a fully qualified financial planner, with fairly minimal effort.




I studied with these guys and finished around 6 weeks ago. Admittedly I came from a "non-financial" background although I did study maths in year 12. It took me 13 months (as I work full time as a pathology scientist). I reckon on and off I would have spent close to 350 hours studying minimum so not sure how this journalist was able to get through like he claims. I wouldn't be able to read and digest let alone complete the assessments in what he's suggesting. The superannuation section alone took me 5 months to get through. Those multiple choice questions are not a fair reflection though, most of them were pretty hard. Anyway my feeling about studying online hence not having to do sit down exams like at uni (which I did in my science degree) is mixed. I think you probably should have set exams, but then I pretty much forget everything after cramming that way so I guess people learn and retain knowledge differently. I will say I haven't been able to get a job, and the recruiter I spoke to said that it is a really bad time to get work in the financial planning industry as a new graduate with no experience


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## dutchie

https://www.abc.net.au/news/2019-12...of-truth-arrives-new-regulator-fasea/11796254


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