Professional Financial Adviser Fees

[Kayman]

Kayman, it is much less difficult or complicated to DIY than you probably imagine. I have sent you a PM. Check your PM inbox.

Thanks Julia,
I'll respond to your PM shortly.
Kind regards...

 

[Kayman]

Hi Kayman,
let me say first I cast no serious aspersions on FP just doing their job and very much needed by many

Yes, alas many advisers will take advantage of the 'inexperienced' and 'not-so-savvy' investors

The objections I had were:
too high fees
no sell side advice ( with most)
I should never pay a management fee on cash

From your brief description of your portfolio, I feel certain that you would be able to setup a SMSF for less than $1000 total cost all up per annum and replicate that structure with no more than 10 ASX codes (some may prefer 20)

My investments are within a wrap account, the cost of my pension fund (investments) in terms of administration and investment is 0.63%, the MERs/ICRs are about 0.35% and transaction fees for managed funds are $30.25 per transaction.
Most of my investments are wholesale funds which are only available for participants in the wrap account. If I were to leave the wrap account environment I would have to redeem my existing wholesale funds (which are inexpensive) and re-purchase retail managed funds (which are more costly).
In my particular case, redeeming the funds, winding up my pension fund and start anew without professional assistance would be an insurmountable task! I'd lose money hand over fist!

Using ETF and Hybrids alone, it would track your indexs and volatility the same as present.

As Sir O mentioned, the f-f-s fellows are generally only interested in high net worth individuals. They are in business to make a profit after all!

All of Sir O's comments are very revealing. In fact right now I feel pretty gutted as he basically confirms my suspicion that I'm ripped off (again)! And I thought "this time I got one of the better adviser", oh well. From most of other professions like engineers, dentists, doctors etc. one can get a handle on in terms of performance. There is generally a good chance recuperate to fees and other financial losses from these professionals when proven wrongful conduct.
The obvious question is 'where or how on earth can one find an good adviser'? The do-it-yourself approach is suited not for everyone. Having said that, I most probably terminate my business relationship with my current adviser but keep my investment portfolio as is in the wrap account. I understand that investors are now able to access a wrap account directly without a financial adviser.

( I did find one at least that was prepared to take on all-comers, his rate was $350 p hr as i recall)

Today, I too have been advised of such an adviser with the assistance of an employee of 2020 DIRECTINVEST. I still have to contact him and may shoot him a message over weekend. He's based in Sydney and charges $300.- per hour for a minimum of 6 hours.

I suspect you may feel very unsure of your ability to make a number of investment decisions and enact them. I would consider that to be normal.That is what peronal investing is all about though

Yes, the uncertainty in relation to these particular investment decisions is causing me considerable distress.
Have a wonderful weekend, awg.

 

[Kayman]

So for six years of perfromance you are down 7.70%???

Yes, but only due to the amounts taken out (monthly pension payments, ongoing advice fees and wrap administration fees). I guess if I hadn't withdrawn any funds then the performance would be up by 5.80% (this is the explanation my adviser came up with).

I empathize with your situation Kayman, my actual response when I read this referred to your financial advisers as the wrong end of a mangy dog. I will say this once - you are getting screwed.

Well, this is not the first time, and believe me it's not easy getting used of this.
In reference to my previous post: "If for example I would stick to to my current investment strategy and fund managers in my wrap account say for another 20 years or so..." is this something I could contemplate or should the thought be dismissed outright. (I'm not asking for advice just an educated opinion).

WHAT?! *Choking on my own rage here* Kayman you're making me old before my time. Go back to your Adviser, tell him you just found about about Listed Index Funds which charge a tiny freaking trail and give you a perfectly correlated market level of return and tell him if he can't do better than the market than WHAT THE **** ARE YOU PAYING HIM FOR?

<cut by Kayman to shorten post>

THAT is why you got screwed.

As you would imagine, I am completely overwhelmed by your posts. I unfeignedly appreciate your downrightness. Your quality of doing what is right and avoiding what is wrong is admirable, it's a real shame (IMHO) that only a selected few have access to your professional guidance.

Thanks again for write-ups which without doubt will other forum members find most benefitial as well.

Kind regards...

 

[Julia]

I guess salesmanship is one of the essential attributes of any business enterprises including financial services.

And here you have the essence of why so many people are being screwed by so called advisers.
I think you initially told us that your present adviser is 'really, really good'.
I would agree 100%: at selling you on what he wants you to believe.

how on earth would I know what crucial question to ask in the first place?

Quite. And hence the appropriateness of your quoting of Mr Rumsfeld's musings about known unknowns.

Your 'adviser' is counting on this. I am putting 'adviser' in quotes advisedly because I do not believe he deserves the term in any professional sense.

(

Yes, your are correct. With the exeption of a term deposit and cash holding account my financial portfolio is entirely made up of a number of managed funds. The asset allocation consists of about 4.5% cash, 26.4% fixed interest, 8.7% property, 37.3% Australian shares, 23% International shares. This is, according to my adviser, in conformance to my long-term goals.

I suppose you know that in addition to what you are actually being charged, your 'adviser' is receiving trail commissions on all the managed funds. This is obviously a pretty good reason for him to recommend that you stay fully invested in these funds during the GFC, don't you think?
If he'd even suggested you protect your capital by moving to cash when he should have seen the GFC coming, then he would have adversely affected his own self interest, i.e. cut off his commissions.
Did he care about how you were affected by the GFC? Fairly obviously not, given he clearly had no strategies in place to either hedge your investments as suggested by Sir O, or simply protect any profits that you may have had prior to then.

You were invested during a strong bull run prior to the GFC. The returns quoted are simply abysmal, even allowing for fees.

And no, I honestly can't see anything wrong with that, my finacial acumen is obviously inferior to yours as I am trained in a different field. Seriously, if I knew I'd talk to my adviser promptly.

And herein lies a very good reason for educating yourself, even if you decide not to totally DIY, at least you should know enough to know when some crappy individual is making money at your expense.

My adviser categorically states "we are in the business of ensuring our clients earn the market return (11.48% for the S & P 500), and not the average investor return (4.48%)." Quite true and achivable especially prior GFCT. Alas the mud hit the fan violently and the adviser hardly can be blamed for this.

Oh wow. But if it's any comfort, Kayman, all the 'advisers' and economists that were paraded through the media throughout the GFC said similarly.
They pretty much all said "just hold on in there, it will all be fine in the end'.
Whacko! Fine for them, they meant in that they continued to receive their revenue streams!
The impending GFC was clear to see. It is simply unconscionable for so called advisers not to have taken protective action on behalf of their clients.



T

he truth is I am happy because I don't know any other way to invest reasonably safe and not to jeopardise my nest-egg. I am too old to start all over again.

As I said earlier, it is much easier than you may think.

I'd be devastated if I were to lose everything!

Of course you would, and there's no reason that you should be losing at all.
Do not allow what you don't at this stage know to become an impossible barrier to learning some basic tools for looking after what you have worked for.

It's clear to me that both the adviser and f/manager would feel no suffering whatsover.

Exactly.

Sometime, when you're feeling stoic, have a read through the Storm Financial thread on this forum, Kayman.
You will see how trusting investors lost everything they had, including their homes via trusting a persuasive salesperson in the form of an 'adviser'.
It is a thread every client of a financial adviser should read, painful though it may be.

:

You bet your little cotton socks that your adviser can be blamed for your current financial situation. What he did is he played hard fast and loose with your money with no protection in place. Oh he's not alone, the whole ****ing industry did the same stupid **** - but as I said before it's no skin off their nose if you are living on tinned baked beans in ten years time coz they screwed you because of negiligence or incompetence.

Quite so, and I'd add because of their own greed.

Your Adviser did not protect your assets correctly

But how could he have known that the GFC was coming? He's not a soothsayer!!!

Wow that's a great chestnut. We aren't fortune tellers, we can't tell the future. (It sound suspiciously like a black swan event kind of comment.) No profit without risk. Great! lets disavow all responsibility towards the people who entrust their life savings to us.... and hey it's not our money so lets not have any risk protection in place either.

And the incredibly sad thing is that many of these clients still do not realise how screwed over they have been.

How about September 07, when Northern Rock had to apply for Emergency financial support from the Bank of England as lender of last resort causing the biggest run on a Bank seen in a century... Did we still need to be fortune tellers to put risk protection in place?

Perhaps October 07 when UBS announced losses of 3.4 Billion dollars from sub-prime related investments...did we need to be fortune tellers then?

Yep, it simply beggars belief that so called experts could experience all this stuff, even the falling over of Lehmans, and still deny there would be any problem.


Kayman, I'm really feeling for you at present, as it seems Sir O's comments have come as a complete revelation to you. It's always immensely disheartening to realise that we have been done.
But it has happened to many before you, and will happen to many more.

You are clearly still in a quite OK position, unlike many of the Storm investors who were duped utterly.

It's not too late to acquire some very basic understanding and start to take control. There is much useful information on this site. Sir O's thread for beginners is an excellent start.

All the best
Julia

 

[Sir Osisofliver]

Yes, but only due to the amounts taken out (monthly pension payments, ongoing advice fees and wrap administration fees). I guess if I hadn't withdrawn any funds then the performance would be up by 5.80% (this is the explanation my adviser came up with).

Kayman. Where was the market at the time you invested? Where was the market six months before the fecal matter hit the windmill? This is the level of capital return you should expect from a halfway decent adviser. This is not to mention the level of income stream coming from those assets...

With interest rates high 6's and low 7's for a large portion of that time if you'd simply had your 1.7 million in cash your income would have been $102,000+ pa before tax.

If the adviser is not doing better than that.......

Well, this is not the first time, and believe me it's not easy getting used of this.
In reference to my previous post: "If for example I would stick to to my current investment strategy and fund managers in my wrap account say for another 20 years or so..." is this something I could contemplate or should the thought be dismissed outright. (I'm not asking for advice just an educated opinion).

I had a client come to me last year in a similar situation to yourself (except they were not in pension phase). Their very large super account (+3M) was down over 40% during the GFC. Their adviser (who worked for a major bank but I shall name no names), did a forward projection on how long it would take for the managed funds to return to pre-GFC levels. The bank's projection? 25 years for the assets to build back to their previous levels (and this is without them drawing a pension). If you really want an exercise in frustration ask your adviser to tell you how long it will be before your account is back to where it was just before correction, you'll probably get a similar answer.

You can probably tell that I don't like managed funds. As a simple rule the more people between you and the asset - the lower your return. Whilst this should not be construed as advice in any way, I would seriously lresearch opening a SMSF (self Managed Superannuation Fund) and purchasing appreciating, income producing assets directly.

As you would imagine, I am completely overwhelmed by your posts. I unfeignedly appreciate your downrightness. Your quality of doing what is right and avoiding what is wrong is admirable, it's a real shame (IMHO) that only a selected few have access to your professional guidance.

Thanks again for write-ups which without doubt will other forum members find most benefitial as well.

Kind regards...

Cheers

Sir O

 

[tech/a]

Reading through this thread has me confirming that managing my own super---indeed financial security is the best decision.

But I ask THIS

What do you/or would you expect of a Financial Adviser??

This is my answer

(1) I expect they can advise and position you on the right side of ANY major move in the market which would severely positively or negatively effect your/my portfolio.

(2) I expect that their grasp on economics and the cause and affect of major turns in economics will enable them to alert me to emerging opportunities early enough to take advantage of them

(A) The widely un balanced housing market in 1995 to 2003 would have been nice where it was IMPOSSIBLE to negatively gear a 4 bedroom house on 20% down (fortunately I saw this when none of my friends 3 F/A's).

(B) Gold when it was $275 and ounce would have been nice---one I know DID
point this out---I watched!

(C) AUD at 53c would also have been nice.

(D) Oil on its way from $12/Barrel to $140/Barrel then Back down to $30? barrel.

(E) Zinc 2003 - 2007 $800/T to $4500/T

(F) Silver $5 to $20.

Any one of these could have been potentially life altering.
With correct Risk management (Id have thought an F/A would be widely versed in Risk Management and Portfolio Management---Unfortunately I know more than most I know---They in general when asked have the blankest look you could see on their face----Risk WHAT?)

If they cant put you in front of these economic opportunities then they IN MY OPINION are hardly Financial advisors.

As we know Managed fund sales people.

 

[Kayman]

Kayman. Where was the market at the time you invested?

About $1.7 million (my market)

Where was the market six months before the fecal matter hit the windmill?

About $2.3 million (my market)

FYI
An exchange of e-mail messages, (the names have been obfuscated)
-----Original Message-----
From: Kayman
Sent: Thursday, 9 October 2008 8:14 PM
To: Financial Adviser
Subject: Pension Fund.

Hi Financial Adviser
"AUSTRALIA is faring well in the global financial crisis but the bottom
line is bad for investors," Prime Minister Kevin Rudd said today.

Mr Rudd, who gave a press conference just after 1.40pm (AEST) [Oct. 9
'08] said the global financial crisis would strike a "really bad" blow
to Australians' superannuation savings.

"This is one of the really bad developments and bad impacts of what's
happening out of a series of bad news from, bad news announcements from
the global economy," he said.

"... Let's be absolutely clear about it. What is happening in the global
economy and what people see daily on their television screens and the
impact on stockmarkets affects people's superannuation earnings, it
really does.

"It hits the bottom line and it's bad, it's really bad. Let's not mince
words about it."

My questions to Financial Adviser: - how bad is all this with respect to my pension fund? Allprevious provided models in the Strategy & Portfolio Review such as Allocation Pension Illustrator etc. are obviously no longer valid and have become meaningless. Whilst I don't expect an outright doomsday scenario (i.e. 1929 depression) it is in my view bad enough considering my age and relative small (and shrinking) pension investment.

My gut tells me that things are getting worse and the value of the funds
in my portfolio are declining rapidly which can't be good when it comes
to paying dividends/distributions. Although I may have enough cash on
hand to keep me going for a while, the real worry is, as far as I am
concerned, the recovery period; Listening to some of the financial
experts on Australian ABC, CNBC and CNN, this period (bringing my
portfolio back to pre Sep 08 status) could be 10 years or even longer. The financial journalists writing in the Wall Street journal are of similar view.

Considering the existing uncertainty in the financial environment, I am
inclined redeeming all existing funds and investing the proceeds into a
Term deposit account (similar to Westpac or any other Australian bank)
for 60 months (I believe special rates for larger deposits are available
on request).

I understand that the Australian banks have strong balance sheets and
are well regulated thus making them a pretty safe haven to invest.

In my view this would be a better/safer investment than the existing
arrangements. This may not be agreeable to some parties but in the end
it is me who is affected by all this - getting a job is unrealistic. I
know this is an almost 'all-eggs-in-one-basket' investment proposition
but in my view much safer and less headache considering existing
conditions.

During an interview aired on CNBC (8 Oct 08) with John Bogle (founder of
the Vanguard Group of mutual funds) stated that he'd advise holders of
(American) 401k pension fund to cash-in to cut and avoid further losses.
(I do realize that this comment was directed to American citizen but
since the the entire fiasco is global and not restricted to the US this
advice may well apply to pensioners like me).
Apparently, John Bogle has a reputation for being always concerned about
small time investors.

Please have a close look at my request and, if applicable convince me
otherwise and comment accordingly in due course.
Rgds...Kayman.

From: "Financial Adviser" <XXXXXX.com.au>
Sent: Wednesday, 15 October, 2008 1:43 PM
To: "Kayman" <XXXXXXX@XXXXX.com>
Subject: RE: Pension Fund.
Hi Kayman,
Your comments are correct, the last few weeks have seen significant
volatility in global financial markets, including property markets,
share markets and currency markets. While the comments from Kevin Rudd
are accurate, we need to remember that the nature of share and property
market assets is bull and bear. Such short term volatility is the price
for a higher long term return on our assets. Clearly this has worked in
your favour in your pension fund, I have attached some information in
relation to the short term returns (last 12 months) and longer term
returns (since the fund was established in October 2004 - so almost 4
years). This shows that through to the end of September 2008 (ie. this
includes the present market correction), your fund's average annual
return was 7.98% per annum. On this basis, I have to disagree with your
assertion that all previous models are no longer valid, at present they
are more valid than ever.
In fact, the starting point for such an analysis of "should I sell and
move to cash" must start with a review of your objectives. I have
attached a page from our initial planning exercise in July 2004, with
your stated objectives, which I assume have not changed. Unless your
objectives have changed significantly, then there is absolutely no
reason why a temporary market correction should cause us to change our
asset allocation and position, assuming we have widely diversified
assets, as you do. While I do not have a transcript of Jack Bogle's
interview, I have attached an article from Vanguard CEO Bill McNabb
which makes for interesting reading.
The crux of the issue is your assertion that the "recovery" to bring
your portfolio back to its position in say November 2007 (the height of
the market) could take some time. I believe this is the wrong issue to
focus on. It is not the time to get back to where we were at the top
that is the issue, but from where we are right now (40% off our highs),
do we expect a higher return from our diversified portfolio of 70%
growth assets and 30% conservative assets, or from a term deposit asset.
As noted, we need to bear in mind that these assets are now close to 40%
off their highs of November last year. I have attached a chart showing
the returns on the Australian and US sharemarket for each decade since
1926 (1950 for Australia). You will note that even during the great
depression, equity markets still gave a strong return for the full 10
year time frame of the 1930s. In fact, in US markets alone, the last 8
years has been the worst period for an Australian investor (after
allowing for currency). So unless there is a reason why we will deviate
from our long term plan (5 - 10 year) we very strongly advocate no
change whatsoever to you portfolio.
I have attached a few pages of what we call tough market quotes put out
by our Melbourne affiliates, which clearly shows the need to maintain
your position.
I reiterate our very strong view not to make any changes to your pension
portfolio.
Kind regards,
Financial Adviser

You can probably tell that I don't like managed funds. As a simple rule the more people between you and the asset - the lower your return.

I shall keep this rule in mind!

Whilst this should not be construed as advice in any way,...

For the sake of clarity I won't take any of your posts in relation to my queries concerning my financial position as an advice.

I would seriously lresearch opening a SMSF (self Managed Superannuation Fund) and purchasing appreciating, income producing assets directly.

In my particular case, redeeming the funds, winding up my pension fund and start anew without professional assistance would be an insurmountable task! I'd lose money hand over fist! I'm not game to do all this by myself.

 

[Julia]

While the comments from Kevin Rudd
are accurate, we need to remember that the nature of share and property
market assets is bull and bear. Such short term volatility is the price
for a higher long term return on our assets. Clearly this has worked in
your favour in your pension fund, I have attached some information in
relation to the short term returns (last 12 months) and longer term
returns (since the fund was established in October 2004 - so almost 4
years). This shows that through to the end of September 2008 (ie. this
includes the present market correction), your fund's average annual
return was 7.98% per annum. On this basis, I have to disagree with your
assertion that all previous models are no longer valid, at present they
are more valid than ever.

This bloke could give any politician a run for their money in the spin stakes.

The crux of the issue is your assertion that the "recovery" to bring
your portfolio back to its position in say November 2007 (the height of
the market) could take some time. I believe this is the wrong issue to
focus on.

I just bet he doesn't want to focus on this! See Sir O's earlier post about expected time for such a recovery.

It is not the time to get back to where we were at the top
that is the issue, but from where we are right now (40% off our highs),

In other words, just don't you worry about having lost about half your asset value, just forget it ever reached the previous high and it will be just fine, baby.

.

I have attached a chart showing
the returns on the Australian and US sharemarket for each decade since
1926 (1950 for Australia). You will note that even during the great
depression, equity markets still gave a strong return for the full 10
year time frame of the 1930s. In fact, in US markets alone, the last 8
years has been the worst period for an Australian investor (after
allowing for currency).

You started your fund, I think you said, in 2004. The market essentially doubled from then to the peak at November 2007 in Australia.

Your p/f, if appropriately placed, should have at the very least done likewise.

So unless there is a reason why we will deviate
from our long term plan (5 - 10 year) we very strongly advocate no
change whatsoever to you portfolio.

Translation: we will fight like hell for you to maintain our income stream from these managed funds. We don't give a stuff about your personal situation.

In my particular case, redeeming the funds, winding up my pension fund and start anew without professional assistance would be an insurmountable task! I'd lose money hand over fist! I'm not game to do all this by myself.

OK, so you'd rather continue being screwed over gradually, year by year,in order to maintain the income of your so called adviser?

You only think it's an insurmountable task to take control yourself because it's an area new to you. Also, because you have become accustomed to this 'adviser' talking at you with all his obfuscating terminology and undoubtedly a confident and assertive tone, your own common sense (which is clearly depicted in your email to the adviser) is being undermined.

He has created for you the impression that you are receiving top advice and the absolute best returns available in a difficult market.
He is conveniently leaving out the strong bull market from 2004 to end of 2007.

He has utterly and completely failed to protect your profits achieved in that period (assuming such profits actually to have accrued?).

Your decision entirely, of course, Kayman, but you would not have been posting this info up on this forum if you were not significantly disquieted and anxious about what is actually going on here.

 

[burglar]

... posting this info up on this forum if you were not significantly disquieted and anxious about what is actually going on here.

After reading this thread, I am "significantly disquieted and anxious" *insert appropriate smiley*

 

[burglar]

As a simple rule the more people between you and the asset - the lower your return.

Cheers

Sir O

Sir O,
Congrats, you've scared the burglar!
I have been following some of your threads/posts.
I have no wish to be castigated, but it would be illuminating.
And not just for me, but also for others who pass this way.
I would like to post my dilemma/position.
Can I use company names, it's easier for me?

 

[Kayman]

...we will fight like hell for you to maintain our income stream from these managed funds. We don't give a stuff about your personal situation.

I tend to agree with your 'translation' especially when looking at the projected professional fees for the next 25 years which add up to about $750,000.-...

OK, so you'd rather continue being screwed over gradually, year by year,in order to maintain the income of your so called adviser?

No Julia, I've had it! I am going to terminate the existing 'ongoing advice' agreement but give him the opportunity and invite him to quote for a 'fee for service' arrangement ('knowing the devil...'). This type of arrangement would personally suit me as the 'changes' would not be as sudden and drastic and give me more time taking control over my investment gradually. If he declines my proposal than so be it!

You only think it's an insurmountable task to take control yourself because it's an area new to you. Also, because you have become accustomed to this 'adviser' talking at you with all his obfuscating terminology and undoubtedly a confident and assertive tone, your own common sense (which is clearly depicted in your email to the adviser) is being undermined.

In hindsight I should've joined up with a forum such as this a very long time ago. The different perspectives from all your participants are invaluable, educational and eye-opening!

He has created for you the impression that you are receiving top advice and the absolute best returns available in a difficult market. He is conveniently leaving out the strong bull market from 2004 to end of 2007.
He has utterly and completely failed to protect your profits achieved in that period (assuming such profits actually to have accrued?).

I suspected so for quite some time but somehow never was able to prove my theory (intuition). Other than emotions or instinct I guess I never knew how to compose an intellectual/rational reply to my f/adviser's responses.

Your decision entirely, of course, Kayman, but you would not have been posting this info up on this forum if you were not significantly disquieted and anxious about what is actually going on here.

You Julia, Sir O and awg given me the encouragement to initiate appropriate changes and thank you for this wholeheartedly.

With all good wishes...

 

[awg]

I tend to agree with your 'translation' especially when looking at the projected professional fees for the next 25 years which add up to about $750,000.-....

think of that compounding in your account, although didnt you mention to be in your late 60s?..your FP really is an optimist..:

I am going to terminate the existing 'ongoing advice' agreement but give him the opportunity and invite him to quote for a 'fee for service' arrangement ('knowing the devil...'). This type of arrangement would personally suit me as the 'changes' would not be as sudden and drastic and give me more time taking control over my investment gradually. If he declines my proposal than so be it! .

I suspect you may as well spit in his face, sorry

In hindsight I should've joined up with a forum such as this a very long time ago. The different perspectives from all your participants are invaluable, educational and eye-opening!.

Lots of good threads can be searched, researched.

I have changed many aspects of my investment style, that would not be used by 99%? of FP, ie investing in many smaller cap shares.

At the same time I have taken measures to balance risk and volatility across my entire portfolio

I suspected so for quite some time but somehow never was able to prove my theory (intuition). Other than emotions or instinct I guess I never knew how to compose an intellectual/rational reply to my f/adviser's responses.

You Julia, Sir O and awg given me the encouragement to initiate appropriate changes and thank you for this wholeheartedly.

With all good wishes...

You may wish to consider drawing up a business-style plan for how you intend to proceed.

One needs to be honest and realistic about what is desired and expected

btw, what exactly are you expecting?

continuous buy/sell advice on all classes + regular asset allocation advice, accounting and banking package, that is boutique service ole mate, you would be expected to pony up

 

[Kayman]

Thanks Julia,
I'll respond to your PM shortly.
Kind regards...

Hi Julia,
Response to your PM sent off today.

Cheers...

 

[newbie trader]

This is probably one of the main reasons why I am trying to learn how to invest and manage my money, so as I don't have to rely on others and fork out thousands in fees. I'm still somewhat unsure about the differences between the various financial services available to individuals as I have never used any myself. I remember reading about Stefan and his action...

http://www.brisbanetimes.com.au/que...s-giant-for-lost-millions-20100802-1132c.html

 

[Kayman]

think of that compounding in your account, although didnt you mention to be in your late 60s?..your FP really is an optimist..:

Precisely

I suspect you may as well spit in his face, sorry:

I'll keep you informed

Lots of good threads can be searched, researched.

Yes indeed, a wealth of good quality information!

I have changed many aspects of my investment style, that would not be used by 99%? of FP, ie investing in many smaller cap shares. At the same time I have taken measures to balance risk and volatility across my entire portfolio.
You may wish to consider drawing up a business-style plan for how you intend to proceed.
One needs to be honest and realistic about what is desired and expected
btw, what exactly are you expecting?.

Some of my objectives:
To retain an adequate cash reserve fo immediate access as required for emergencies.
To preserve flexibility by choosing some (liquid) investments which are readily redeemable.
To maintain an investment portfolio that has a solid overall long-term security with a time horizon of at least five years.
To maintain a spread of both direct investments (shares) and managed investments (funds) which do not require my personal active day-to-day attention.
To maintain appropriate diversification across asset classes within asset classes across countries or regions and across management styles.
To obtain a positive rate of (after tax) return of investments and protect the value of investment capital against the effectives of inflation.
To prevent erosion of capital outlay.
To achieve capital growth over the long-term at least in the line with the rate of inflation.
To generate an annual after-tax income of $xxxxxx to cover my living expenses. This amount excudes professional fees/charges for financial adviser and tax accountant and Australian income tax payments.

Cheers...

 

[awg]

The light bulb went on when I realized that "fees" were actually
jostling with tax and food as my No1 expense.

When I analysed what I was getting for that fee in regard to by far the biggest asset in my families life
.

No specific buy or sell advice at all !
No regular review
An admin service
A couple of clever young fellows to chat to about asset allocation
A fairly long list of restrictions

Then I realised I was lazy, and had not taken proper responsibility for my situation

For a smirk, try telling a lawyer that self-representation is a good idea

 

[prawn_86]

This is a truely great thread.

Thanks to all the posters who have contributed so far, its threads like this that make ASF what it is.

 

[Julia]

I suspect you may as well spit in his face, sorry

Quite so. Having placed your money into managed funds, Kayman, that is simply all it takes for him to continue receiving trail commissions for the rest of your life, should you stay so invested.
If you were, however, to move to a different 'adviser', then that new adviser can write to the managed funds and say "Whacko, we are now handling Kayman's affairs, so please transfer the trail commission to us". How good is that, Kayman? They didn't even have to do a thing, other than tell a secretary to fire off a form letter !

I have changed many aspects of my investment style, that would not be used by 99%? of FP, ie investing in many smaller cap shares.

I also completely reject the groupthink of asset allocation and investment style so beloved of all the managed funds and 'professional advisers'.
I expect it is much easier for them to put all their clients into similar stuff across the board. Even less need to think about personal objectives if they do that.

I think there is way more sense in being more heavily invested in sectors that are doing well at any given time, then moving funds when that changes, than having diversification just for the sake of it. e.g. why would you have your funds in international shares if global markets are falling? Just makes no sense. You need to be prepared to move your money around in accordance with where it is going to work best for you. This is not difficult.

Some of my objectives:
To retain an adequate cash reserve fo immediate access as required for emergencies.
To preserve flexibility by choosing some (liquid) investments which are readily redeemable.
To maintain an investment portfolio that has a solid overall long-term security with a time horizon of at least five years.
To maintain a spread of both direct investments (shares) and managed investments (funds) which do not require my personal active day-to-day attention.
To maintain appropriate diversification across asset classes within asset classes across countries or regions and across management styles.
To obtain a positive rate of (after tax) return of investments and protect the value of investment capital against the effectives of inflation.
To prevent erosion of capital outlay.
To achieve capital growth over the long-term at least in the line with the rate of inflation.
To generate an annual after-tax income of $xxxxxx to cover my living expenses. This amount excudes professional fees/charges for financial adviser and tax accountant and Australian income tax payments.

Cheers...

Kayman, forgive me if I'm being unkind, but the above sounds like a direct copy and paste of what your 'adviser' will have provided you with in a Statement of Advice. It is more of the spurious groupthink they run off by the thousand and hand out to everyone.

It sounds pretty good, huh?
Only tiny problem is that they are totally and utterly failing to fulfill this.

 

[Julia]

Hi Julia,
Response to your PM sent off today.

Cheers...

thanks, Kayman. Reply sent this evening.

 

[burglar]

I always knew I was being shagged but didn’t much care.
Thought it was beyond my control anyways.
Put very little into Super cos I expected to live on the pension.
Never in my wildest dreams did I think I could become well off (and I didn’t)!
I was brought up in poverty.
As Billy Connolly would say, I didn’t know, I had nothing to compare it to.

I started Super with Company X on a Rainbow Policy.
It changed hands several times til it ended up with Company Y
I arranged to meet their financial advisor.
He advised me to rollover all but the foundation units into Company Z.
Exit fee for foundation units are apparently extreme.
Why would I reward Company Y’s non-performance with a whopping exit fee?

My productivity super was with the Fed Guvnmnt with 9-10% p.a. return.
On becoming redundant, I was told I need to roll it over into a private super fund.
To this day I don’t know why I passively accepted this. Rolled over into Company K.

In the lead up to Global Financial Crisis, I met with financial advisor
I showed him Company K’s performance.
We agreed it was flagging compared to Company Z. Rolled over into Company Z.

I daren’t look now, but when I last looked they were doin’ just Ok

I withdrew 30k and put it in speculative mining juniors.
Losing half in the downturn and then getting it back.
Only to lose some again with two bad picks and the stoopid new tax.
No big deal, I was prepared to loose some, knowing it would bounce back.

From what I’ve read at ASF, I have probably done far worse I could imagine.
(I don’t know what I don’t know)
Here’s the rub.
Where do I go to from here?