Professional Financial Adviser Fees

[Julia]

This thread would have been a better choice for a post I put up a few days ago asking what is the going rate for financial advisers handling individual Super accounts. A friend has been quoted 1.3%. He currently has around $500K. That's a pretty hefty $6500 p.a. in fees. The adviser has assured him it will be 'no trouble' to generate $40K p.a. from his capital base. That will be $46,500 including the fee.

 

[Vixs]

This thread would have been a better choice for a post I put up a few days ago asking what is the going rate for financial advisers handling individual Super accounts. A friend has been quoted 1.3%. He currently has around $500K. That's a pretty hefty $6500 p.a. in fees. The adviser has assured him it will be 'no trouble' to generate $40K p.a. from his capital base. That will be $46,500 including the fee.

That's not an unusual fund management fee, though higher than what I am used to seeing.

I would run far from any 'adviser' telling you any return of any sort is 'no problem'. The only return that is no problem is cash in government guaranteed accounts. Everything else comes with a risk.

I don't see any 8.65% term deposit rates going around, do you?

 

[Julia]

That's not an unusual fund management fee, though higher than what I am used to seeing.

I would run far from any 'adviser' telling you any return of any sort is 'no problem'. The only return that is no problem is cash in government guaranteed accounts. Everything else comes with a risk.

I don't see any 8.65% term deposit rates going around, do you?

Thanks Vixs. That's exactly what I told him. Unfortunately, he's financially illiterate, hears only what he wants to hear, and thinks I'm raining on his parade when I point out a few truths.

 

[Vixs]

Thanks Vixs. That's exactly what I told him. Unfortunately, he's financially illiterate, hears only what he wants to hear, and thinks I'm raining on his parade when I point out a few truths.

Fees should also be considered as a whole and not on their own.

If his asset management fee includes statements of advice then that might be reasonable. If he is still paying full freight for everything else then you have to consider how much value the adviser is adding to his portfolio.

Not sure where it came from but the line "Sometimes you have to give up on people, not because you don't care, but because they don't."

 

[Julia]

Not sure where it came from but the line "Sometimes you have to give up on people, not because you don't care, but because they don't."

Yep, pretty much the conclusion I've reached.

 

[Value Hunter]

If you want to spend money on advice don't waste it on a financial planner.

I believe based on how complicated your financial situation is get advice from a range of other professionals. You should be looking for advice in relation to admin, tax, insurance, borrowing, asset structuring, etc. I recommend strongly against getting advice on what to invest in. I therefore advise against getting advice from a financial planer, stockbroker or property buyers agent. Basically get advice on technical stuff and further your own knowledge to make your own investment decisions:

-If you need it get accounting/tax advice from an accountant/tax agent/tax consultant. Where necessary get one that specializes in super or property or small business, etc if need be. Can help with setting up and managing the admin/compliance (outsourced to an auditor they use) if you decide to set up a self managed super fund.
-Get advice from a conveyancer or solicitor when signing any important legal contract. This is useful for small business purchases, property purchases, commercial lease agreements, etc Can help with setting up trusts, buying property inside self managed super using a structured loan, etc
-Use a personal banker or mortgage broker, etc if you are looking to borrow for any investments, etc
-Use a business advisor if necessary for small business issues.
-Use an insurance broker where necessary e.g. looking to get life insurance paid from your super

Financial advisors are salesman and completely useless generalists who don't know enough about any one topic to be useful.

Most of the plans they give you are a based on a cookie cutter template that is marginally adjusted/filled in by the para-planner at the office.

If they are commission based they care only about getting commissions. If they get flat fees they are usually focused on getting somewhere around average results to stop you leaving because iof they do something different from the herd and massively under-perform or lose they will lose the steady fees you provide as a client. Whereas under-performing the average by the amount of fees charged isn't enough under-performance to entice most clients to leave.

 

[tech/a]

If you want to spend money on advice don't waste it on a financial planner.

I believe based on how complicated your financial situation is get advice from a range of other professionals. You should be looking for advice in relation to admin, tax, insurance, borrowing, asset structuring, etc. I recommend strongly against getting advice on what to invest in. I therefore advise against getting advice from a financial planer, stockbroker or property buyers agent. Basically get advice on technical stuff and further your own knowledge to make your own investment decisions:

-If you need it get accounting/tax advice from an accountant/tax agent/tax consultant. Where necessary get one that specializes in super or property or small business, etc if need be. Can help with setting up and managing the admin/compliance (outsourced to an auditor they use) if you decide to set up a self managed super fund.
-Get advice from a conveyancer or solicitor when signing any important legal contract. This is useful for small business purchases, property purchases, commercial lease agreements, etc Can help with setting up trusts, buying property inside self managed super using a structured loan, etc
-Use a personal banker or mortgage broker, etc if you are looking to borrow for any investments, etc
-Use a business advisor if necessary for small business issues.
-Use an insurance broker where necessary e.g. looking to get life insurance paid from your super

Financial advisors are salesman and completely useless generalists who don't know enough about any one topic to be useful.

Most of the plans they give you are a based on a cookie cutter template that is marginally adjusted/filled in by the para-planner at the office.

If they are commission based they care only about getting commissions. If they get flat fees they are usually focused on getting somewhere around average results to stop you leaving because iof they do something different from the herd and massively under-perform or lose they will lose the steady fees you provide as a client. Whereas under-performing the average by the amount of fees charged isn't enough under-performance to entice most clients to leave.

Read and read again

Take control of your and your families financial life

 

[farmerge]

Read and read again

Take control of your and your families financial life

I am a firm believer when the coin you have sweated for is best kept under your own control. Not a fan a paying so-called experts for advice, as they usually only know as much, or in some cases even less than I do. Research, study and ponder, then only one person is responsible for the end result.

 

[tech/a]

I am a firm believer when the coin you have sweated for is best kept under your own control. Not a fan a paying so-called experts for advice, as they usually only know as much, or in some cases even less than I do. Research, study and ponder, then only one person is responsible for the end result.

Most I have found are aiming to be as financially secure as their clients.

If you can’t make it in the first place why do I want your advice?

 

[basilio]

If you want to spend money on advice don't waste it on a financial planner.

I believe based on how complicated your financial situation is get advice from a range of other professionals. You should be looking for advice in relation to admin, tax, insurance, borrowing, asset structuring, etc. I recommend strongly against getting advice on what to invest in. I therefore advise against getting advice from a financial planer, stockbroker or property buyers agent. Basically get advice on technical stuff and further your own knowledge to make your own investment decisions:

-If you need it get accounting/tax advice from an accountant/tax agent/tax consultant. Where necessary get one that specializes in super or property or small business, etc if need be. Can help with setting up and managing the admin/compliance (outsourced to an auditor they use) if you decide to set up a self managed super fund.
-Get advice from a conveyancer or solicitor when signing any important legal contract. This is useful for small business purchases, property purchases, commercial lease agreements, etc Can help with setting up trusts, buying property inside self managed super using a structured loan, etc
-Use a personal banker or mortgage broker, etc if you are looking to borrow for any investments, etc
-Use a business advisor if necessary for small business issues.
-Use an insurance broker where necessary e.g. looking to get life insurance paid from your super

Financial advisors are salesman and completely useless generalists who don't know enough about any one topic to be useful.

Most of the plans they give you are a based on a cookie cutter template that is marginally adjusted/filled in by the para-planner at the office.

If they are commission based they care only about getting commissions. If they get flat fees they are usually focused on getting somewhere around average results to stop you leaving because iof they do something different from the herd and massively under-perform or lose they will lose the steady fees you provide as a client. Whereas under-performing the average by the amount of fees charged isn't enough under-performance to entice most clients to leave.

Well worth highlighting again. In that context have any ASF posters had experience with Invest Smart ? I had a look at the website and it seemed practical and impressive.

Managed Funds, Shares, Property & Investment News - InvestSMART

Managed Funds, Shares, Property & Investment News - InvestSMART. Find out more at InvestSMART.

www.investsmart.com.au