Financial Planners Brought To Account

[tech/a]

The people who we are supposed to be worrying about are the sort of retirees etc, with moderate savings, who somehow get caught up in messes like Storm.

AND the professional F/A fraternity don't want them!

I wouldn't want them either.
They want the world and the want it NOW!
and want it for next to nothing.


One solution
Perhaps an insurance cover by the vendor to cover
catastrophic loss from the consumer.
Much like Home Owners Warranty Insurance in the Building Industry
Or Mortgage Insurance for Low Doc Loans?

 

[Sir Osisofliver]

AND the professional F/A fraternity don't want them!

I wouldn't want them either.
They want the world and the want it NOW!
and want it for next to nothing.


One solution
Perhaps an insurance cover by the vendor to cover
catastrophic loss from the consumer.
Much like Home Owners Warranty Insurance in the Building Industry
Or Mortgage Insurance for Low Doc Loans?

Ok so here we get to the main reason why we educate our clients....is to give them reasonable expectations around levels of return and trade off between potential return and risk management, among other things. Sometimes though it's a little hard to remember your lessons when the emotion grips you tightly.

Many people also don't know where to turn for good information, because drama sells newspapers and the media can be trusted to blow any issue all out of proportion.


Cheers

Sir O

 

[The Falcon]

Ok so here we get to the main reason why we educate our clients....is to give them reasonable expectations around levels of return and trade off between potential return and risk management, among other things. Sometimes though it's a little hard to remember your lessons when the emotion grips you tightly.

Many people also don't know where to turn for good information, because drama sells newspapers and the media can be trusted to blow any issue all out of proportion.


Cheers

Sir O

Spot on. During the "get to know each other and see if we can work together meeting" my advisor gave me a copy of Peter Thornhill's "Motivated Money" and said, have a read of this, this is broadly how I think about stocks, tell me what you think once you have read it. (For the unitiated, Thornhill is long, value, dividend reinvestment and letting compounding work, industrial stocks focus, quality, ignore all the daily noise, embrace volatility and buy when there is blood in the streets, never sell, get rich slowly etc). All of this made plenty of sense to me then and still does, so I was happy to work with him.

The bloke is a CA & CFP, has his own AFSL and a couple of staff, provides private wealth/family office services which extends to co-ordinating legal, and tax planning (with my accountant). Fee for service only (retainer basis), doesn't do "products". Direct Equities (incl. ETFs and LICs), Bonds, Cash. No mucking around. Have learned plenty, and also provides a great sounding board for general business and investment advice. Got to meet the CEO's of AFI and ARG at small meetings, bounce around value investing ideas regularly, and heading off to Berkshire Hathaway AGM with a bunch of blokes next year (everyone paying their own way obviously).

Has been a very good experience, and fair value I would say....though I realise this is far from the typical experience.....having myself many years ago been stooged by PIS I have experienced both ends of the industry. Obviously, for most people this kind of service is not going to make financial sense, but its out there, all under the same "FA" banner. Worlds apart.

 

[Vixs]

Obviously, for most people this kind of service is not going to make financial sense, but its out there, all under the same "FA" banner. Worlds apart.

I think this sums up a great deal of the thread. There are people in different leagues all running around with the same title.

If you have 25 clients with $150k as a bank planner, you have a book. If you have 25 clients with $150k as a planner in private practice, you're probably going backwards if you weren't being kept afloat by new business.

 

[tech/a]

I think this sums up a great deal of the thread. There are people in different leagues all running around with the same title.

If you have 25 clients with $150k as a bank planner, you have a book. If you have 25 clients with $150k as a planner in private practice, you're probably going backwards if you weren't being kept afloat by new business.

If you have low end clients you tend to be a Managed Fund ( place to park funds ) insurancel salesman
Life Insurance and Disability Insurance being the best paying.
These guys pose as F/A's ---- they're not in my book.

 

[Garpal Gumnut]

I still reckon Financial Planners pitching to either Mr. and Mrs. Shopping Trolley or to so called "Sophisticated Investors" are muppets.

One and all, bar none.

gg

 

[Vixs]

Another note on how far removed from the average punter that we, people who voluntarily spend time on (and at least a good bit of the time enjoy...) a board about finance and investments, really are, I have a fun fact.

I spoke to 3 people today whose expectations of the kind of returns investing through an adviser would get them were 10-15% p.a. year on year, and that they would not tolerate any risk of capital loss. This is what you are up against when trying to give advice to the unwashed masses. Why do you think Australian's love property investment so much? Because real estate agents and property spruikers can promise whatever they like, and all the banks will let them borrow as much as they possibly can...

 

[Garpal Gumnut]

Another note on how far removed from the average punter that we, people who voluntarily spend time on (and at least a good bit of the time enjoy...) a board about finance and investments, really are, I have a fun fact.

I spoke to 3 people today whose expectations of the kind of returns investing through an adviser would get them were 10-15% p.a. year on year, and that they would not tolerate any risk of capital loss. This is what you are up against when trying to give advice to the unwashed masses. Why do you think Australian's love property investment so much? Because real estate agents and property spruikers can promise whatever they like, and all the banks will let them borrow as much as they possibly can...

It does take 2 to tango.

I think Storm Financial proved that.

gg

 

[sptrawler]

Another note on how far removed from the average punter that we, people who voluntarily spend time on (and at least a good bit of the time enjoy...) a board about finance and investments, really are, I have a fun fact.

I spoke to 3 people today whose expectations of the kind of returns investing through an adviser would get them were 10-15% p.a. year on year, and that they would not tolerate any risk of capital loss. This is what you are up against when trying to give advice to the unwashed masses. Why do you think Australian's love property investment so much? Because real estate agents and property spruikers can promise whatever they like, and all the banks will let them borrow as much as they possibly can...

It's no different on here, people saying $600k will give you a reasonable retirement, Live the dream.

 

[Vixs]

I still reckon Financial Planners pitching to either Mr. and Mrs. Shopping Trolley or to so called "Sophisticated Investors" are muppets.

One and all, bar none.

gg

I've found dealing with Mr and Mrs Shopping Trolley (I assume you mean the average Australian?) to be a much more enjoyable experience so far than helping rich people buy boats, holiday homes and sports cars. Might not be as much money in it, but I'll never have to kiss a client's ass over a game of golf or a long lunch.

 

[7mountstreet7]

The scandal of fraudulent investment schemes and investment advisors is not new. The 2008 crisis saw hundreds of Ponzi schemes being identified, most notable the Bernie Madoff scandal.

The interesting development around the world is that cases of investors receiving poor or fraudulent advice continue unabated. So, how qualified should your investment advisor be? Surely they must have studied investments in great detail to be in a position to be able to understand the options they should pass on to their clients. Should you be recommended product A over product B because your advisor earns more money by recommending product A when in effect they are identical investments? Should they not be acting in your best interest?

Sadly it seems, no.

It has been revealed that in some countries, financial advisors can be qualified to give you investment advice after an 8 day course. An 8 day course? Surely not. Yup. What, no need to study investments to a degree standard? Nope.

Without beating these guys up too much, we just find this ridiculous. Just so you know, the best investment degree you can have is the Chartered Financial Analyst (CFA) qualification offered by the Association of Investment Management and Research.

One of the main elements of the CFA qualification is ethics. Ethics is “a branch of philosophy that involves systematizing, defending and recommending concepts of right and wrong conduct”. In English, this means DO THE RIGHT THING.

Make sure you know your investment advisor has the qualifications and experience required to help you achieve your financial goals and be sure they have no misaligned interests when dealing with you. Above all, they should have a strong moral character and strong ethics.

 

[tech/a]

I've found dealing with Mr and Mrs Shopping Trolley (I assume you mean the average Australian?) to be a much more enjoyable experience so far than helping rich people buy boats, holiday homes and sports cars. Might not be as much money in it, but I'll never have to kiss a client's ass over a game of golf or a long lunch.

A personal choice.

Fortunately negotiators aren't all tared with the same brush.
When your trying to secure any business it's a negotiation.
Even Mr and Mrs Shopping Trolley like to be treated like
Their business is valued.
A long lunch---Game of golf would be something special
In their lives----particularly if YOUR PAYING.

I've not yet met a client who doesn't appreciate being
Made a big deal of. They are a big deal they contribute
To my lifestyle. I can be respectful and accommodating
Without being sub serviant

In my book if you want the business from a $1000 client
He should be treated as well as a $ 1 million client.

That's how you get customer loyalty
Could be the difference between you and your competitors.

 

[luutzu]

Financial Planners breaking ASIC Chairman's heart.

.....
“It has absolutely broken my heart to see what financial advisers have done and what they continue to do to people.”

Mr Medcraft said the financial planning sector ”” which has been closely involved in the vast majority of major company collapses over the past decade ”” had repeatedly ignored pressure from ASIC to lift its standard.

“With the financial planning industry, we keep nudging them but we don’t get confidence, there have been nudges, there have been nudges,” he said.

“Australian’s want advice they can trust, it’s absolutely appalling!” ....

http://www.theaustralian.com.au/business/financial-services/asic-absolutely-appalled-by-state-of-financial-planning-industry/story-fn91wd6x-1227143438109

 

[Garpal Gumnut]

Financial Planners are a bit like bed bugs.

They travel about and infect the pure and unsuspecting.

May I ask lurkers who happen upon this site to register and do a search on their investment goals.

Avoid Financial Planners.

gg

 

[pixel]

Financial Planners breaking ASIC Chairman's heart.

http://www.theaustralian.com.au/business/financial-services/asic-absolutely-appalled-by-state-of-financial-planning-industry/story-fn91wd6x-1227143438109

Oh Emm Gee!
Has he ever read his job description?
I'm pretty sure there is a passage hidden in there that it's ASIC's mission to "keep the barstuds honest" and toss the bad apples out.
(If it isn't, it ought to be!)

I'd also suggest that a broken heart is no real help when it comes to doing his job. How about setting proper standards, educating any would-be adviser properly, and ensuring that the rules are followed in the clients' best interest - not to rake in best bonuses. But maybe that's expecting too much.

 

[sptrawler]

I spoke to 3 people today whose expectations of the kind of returns investing through an adviser would get them were 10-15% p.a. year on year, and that they would not tolerate any risk of capital loss. This is what you are up against when trying to give advice to the unwashed masses.

Do people really expect that sort of outcome? They obviously have no concept of reality.

Some of my friends are nearing retirement, go to see a financial planner, are told all is good as long as you don't want a house.

 

[pixel]

Do people really expect that sort of outcome? They obviously have no concept of reality.

Some of my friends are nearing retirement, go to see a financial planner, are told all is good as long as you don't want a house.

Question: Where do the "unwashed masses" get their expectations?
Answer: From the very same advisers that should know better.

Just read through the advertising brochures; or, closer still, read the kind of promises that we (ASF membership) are warning about in those abundantly popular threads on investment scams.

How can we expect Mum and Pop Shopping-Trolley to identify realistic and exaggerated expectations? They are bombarded with promises of double and triple digit profits without risk!

 

[luutzu]

Oh Emm Gee!
Has he ever read his job description?
I'm pretty sure there is a passage hidden in there that it's ASIC's mission to "keep the barstuds honest" and toss the bad apples out.
(If it isn't, it ought to be!)

I'd also suggest that a broken heart is no real help when it comes to doing his job. How about setting proper standards, educating any would-be adviser properly, and ensuring that the rules are followed in the clients' best interest - not to rake in best bonuses. But maybe that's expecting too much.

Exactly.

But then on the bright side, at least he passed the Denial Stage. Maybe next stage will be Anger and then Doing-something-about-it Stage.

Quite funny, in a bad way, to hear a regulator asking their subject to pretty please raise their heart-breaking, appalling, standards. Pretty please.

All you need to do is asked I guess.

 

[Garpal Gumnut]

I do see some high class people excoriating Financial Planners.

Good on them.

Seeing a Financial Planner is somewhat like seeing a Chook Farm Manager about Eggs. It depends.

Herewith more "News" on Financial Planners.

Even if you have slow bandwith it is worth a read.

https://au.news.yahoo.com/thewest/business/a/25678465/asic-lashes-appaling-financial-advisers/

gg

 

[Garpal Gumnut]

It is extremely important that every member of ASF reads this article very carefully.

It may save you Hundreds of Thousands of dollars

http://www.theaustralian.com.au/bus...143438109?nk=21203f55534c7aadcfc17e1795d7d5ef

gg