There is a LOT going on in the Financial Planning Industry at the moment.  Legislative changes, class actions, and investigations.  A lot of Advisers and Licensees are exiting ….. and then quietly on the side, an impressive number of great planners going about their daily tasks to help people achieve a secure financial future.

I did a radio interview a little while ago, where the topic was going to be about New Year’s Resolutions, which quickly changed into answering questions about why you would pay a financial planner when they just charge you fees and you don’t get anything out of it?

The comment from the radio announcer went along these lines:

“So I went to a financial planner a few years ago, and he said he could save me some tax.  But then his fees took away the tax savings so I didn’t get anything out of it”.

My response was something like this:

“So if he did save you tax which paid for his fees, and then he also gave you information on when you could afford to retire, how long your money was likely to last, how much you could spend every year in retirement, and knowledge that you were doing everything you could to your best advantage, is that nothing?

Or is that actually priceless information to provide financial relaxation? 

 Financial Planners need to get paid for their expert knowledge and the hard work they do, so he couldn’t do your work for free.  And if he says it is free, then you would have to ask HOW?”

We agreed that the extra information he had neglected to mention was valuable, and moved on.

But it raises a great point about the objections people have to seeing a financial planner.  They see the fees they pay since legislation (and for most planners, ethics) requires fees to be clearly disclosed.

But how to value peace of mind?

And how to find the good planners amongst the rabble of average, (or unfortunately still there) the dodgy ones?

Whilst as is the case with every profession; there are no absolute guarantees, I suggest you consider the following traits when trying to find a good planner:

  1. Authorised to provide Financial Advice in Australia (so not a Mortgage Broker, Accountant, Real Estate salesperson, Banker or the taxi driver who knows a bit about financial planning).
  2. Qualified at much higher than the base level (base level is generally a Diploma of Financial Planning, soon changing to a degree).
  3. Experienced (more than 5 years as a planner is ideal). The first few years should be closely supervised whilst learning the ropes.
  4. Not linked to a large financial institution (unless you don’t mind being “sold” that bank or institutions products).
  5. Member of a professional association with a strong code of ethics.
  6. A provider of strategic, holistic advice that cares about your goals and objectives and not so much about what products you are in or what products you can be put in.
  7. Focused on you and not themselves.
  8. You pay a fee for their service that is not dependent on product or how much money you have.
  9. Your first impression is that they are good listeners, you like them and you think you should be able to work together.
  10. Your first impression is that they know what they are talking about, and have empathy and understanding of your situation.
  11. They are used to working with clients in your situation (e.g. retiree, family, single young person, complex structures, business planning)
  12. They are recommended by someone you know (who has actually used their services).
  13. They are encouraging but not pushy.
  14. They clearly explain what services they provide, and what fees are payable, without pressure

A financial planner should be someone you can work with over the long term, who listens, and who wants to create an ongoing coaching relationship to help you start to achieve your goals, and then keep on working towards them as things change and you have challenges or achievements.

There are no quick fixes, and if you think that what the person you are dealing with is offering you something that is quick, transactional, or too good to be true, then that is your cue to walk away.

If you don’t like the way you are treated, you think the planner is wanting to sell you products rather than to provide a service, or you aren’t sure you can trust them?  Then that is your cue to run away.

You can’t generalise, and some people may disagree with the list I have prepared above, but in my 25 years in financial services, and 15 years as a former financial planner within multiple organisations and structures, this is the list I have come up with.

If you still aren’t sure, or want more information on advice in general, contact a service that can assist you to enter the financial advice process safely, like Insider Out – Understand and Trust your Advice.

Good luck, and have a great financial future.

Melinda Houghton

Adv. Dip FS (FP)

Insider Out – Understand and Trust your Advice

melinda@insider-out.com.au

0400 533 865

 

This information may be regarded as general.  That is, your personal objectives, needs or financial situations were not taken into account when preparing this information.  Accordingly, you should consider the appropriateness of any information we have given you, having regard to your own objectives, financial situation and needs before acting on it.

I am no longer authorised to provide financial advice.  If you wish to receive financial advice you must contact an authorised provider.

https://www.moneysmart.gov.au/investing/financial-advice/financial-advisers-register

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