Financial issues arising from COVID-19 are arguably one of the most confusing, drastic, and important situations consumers of all types have had to encounter in our lifetime.
You would think that a Financial Adviser would be one of the first points of call for many consumers who need help, with qualified, authorised, and experienced financial experts being the obvious solution to assist many who find themselves in unchartered territory.
Whilst not everyone will need full advice, and certainly not everyone can afford it due to legislative barriers and compliance making advice expensive to provide; you would think that all the work our Regulator and Legislators have done to improve the quality of advice and make sure advisers act in the clients best interests would mean they are directing appropriate clients to a financial adviser, right?
You would be wrong I am afraid.
ASIC’s moneysmart website has a new section called “COVID-19 making financial decisions – Steps to look after your self and your money” https://moneysmart.gov.au/covid-19. This site has a lot of financial information and answers a lot of questions that will assist a large number of people who need information, and ASIC should be applauded on getting this information up and available quickly.
On the main moneysmart website there are links to finding financial advisers in a couple of the sections (e.g. Tools and resources, and Plan for your future) with some excellent information and links.
However, there is no obvious section to refer people to financial advice in the COVID-19 section with any kind of list of who or what questions or problems would be best served by a financial adviser. I feel that many people would be clicking straight to this section in the current environment especially as it is the first link to click on with a “start here” button.
There is a front-and-centre reference to financial counsellors, which is highly appropriate, including a list of “What financial counsellors do”. However, to find a reference to seeking financial advice, I had to click numerous times, and go to the very bottom of the SMSF section to see a section that mentioned financial advice, which as per below has a focus on the fees being charged.
Then, to make the issue even cloudier, apparently ASIC believes that it is okay to say you can get “Free Financial Advice” with then a reference to factual information. See extracts from the website below:
Getting the right financial advice
- Make sure your financial adviser has an Australian financial services (AFS) licence
or is an authorised representative. Check their qualifications on the Financial Advisers Register.
- Decide what you want from the advice. Do you want help with investing money, budgeting or planning for retirement?
- Read your adviser’s Financial Services Guide to learn about their fees and services, and how they deal with complaints.
- Compare the fees charged by different advisers, to make sure you’re getting a good deal.
- Be careful about how much access your adviser has to your investment accounts.
- Talk to your adviser if you’re unhappy with their advice.
Free financial advice
If you’re looking for factual information about investment products and strategies, or want to do some research before you see a financial adviser, there are some good free and low cost options around.
We have useful information and tools to help you plan for retirement and understand how investing works, including:
- Retirement planner — calculate what income you are likely to have from super and the Age Pension when you retire, including contributions, investment options and fees.
- Superannuation calculator — work out how much super you’ll have when you retire.
- How to invest — learn about developing an investing plan, choosing investments and borrowing to invest.
You can also try:
- Financial Information Service — attend free Australian Government seminars on topics including managing your money, reducing your mortgage, investing and superannuation.
- Australian Securities Exchange (ASX) — visit the education centre for information for first-time investors, articles and online seminars.
- Your super fund — get factual information about investment and insurance options, contributions and consolidating your funds.
- Banks, credit unions and building societies — check their websites for retirement calculators and other factual information.
Since I changed from the Adviser side of the fence to the Consumer side, I have spent a lot of time explaining to consumers what advice is, what the advantages are, what the costs are, and why the costs are higher than many expect, however are likely to pay for themselves with the provision of quality financial advice.
Surely our Regulator’s main financial information website could do the same?
I have not yet had an enquiry to Insider Out where I have said “advice is not worth it, you should just go to the ASIC Moneysmart website for ‘free advice’”. This is mostly because people contacting me have a need for a solution that requires personal advice, however some people checking out moneysmart will also have this need.
Existing advice clients should know they can talk to their adviser as their first point of call. But wouldn’t it be great if the regulator was directing some people (where appropriate) away from the overloaded government services to Australia’s experts in financial matters in this crisis?
Some people will be much better off with advice in this drastic climate. If you need assistance to help decide if you are one of those people, please get in touch.
Adv Dip FS (FP)
Insider Out – Understand and Trust your Advice
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.