Do Financial Planners recommend DIRECT Property Investment?
- Thread starter Petal
- Start date
Off topic, but this is a serious breach of ethics; I would be seriously concerned about taking any medication, for which the prescriber had been given any commission... Bad example.
Well then you better do some research in the medical industry. doctors regularly get kickback from drug companies including if they prescribe certain dollar amounts etc..
http://www.bmj.com/cgi/content/full/327/7426/1248-a
I have replied here, so this thread doesn't go off topic.
I have no problem at all with a someone making money on what they sell, I just have a problem with someone who purports to offer unbiased advice on investments but then coincidentally the "best" investment is the one they receive the best commission on!!
Now I am definitely not saying that all financial planners do this but I am pretty sure most financial planners would say to someone that walks in their door and tells them they are thinking of buying an investment property "well ok but lets look at some other investments and compare blah blah blah" and the client will walk out the door signed up to something that the planner sells.
Now I can understand why a FP would do this, because why send away a potential client to a RE agent or Property Investment specialist but what irks me is that there is this myth surrounding the FP association that if you visit one they will do what is best for your needs and this is just not the case. i.e. if direct property investment was the best for the client most FP's would steer them to something else.
Exactly.
If you don't like what you hear (bear in mind sometimes FPs won't tell you what you want to hear, as much because of your biases as theirs), then turn on your heels and walk out.
It's that simple.
You are both missing Petal's main point.
The most widely known way of getting financial advice very rarely advices on the biggest investment most people will have.
Simple.
and how do you know that the best advise would be a direct property?
I don't think any planner will say the investments they suggest are going to be the 'best'. No planner can know what outcome the funds will produce. But they will ask detailed questions to their client, and then produce a plan according to their objectives and risk profile.
The client then has the option to accept it, or not.
Anyone knows if you go to a holden dealership, and ask for the best car, they will sell you a holden, likewise if you go to say the CBA for financial advise, they will offer their colonial products and insurance.
No big deal about it.
Very rarely?
Your post essentially says the the vast majority of financial planners would dissuade a potential client from buying a PPOR in favour of managed funds.
I think that is complete crap.
In the circles I move in it is well accepted that having a PPOR is a cornerstone of financial independance. It is the biggest investment most people make - and that being the case, it could be argued there is even greater reason for many* people to see a FP in order to build up a diverse asset base.
*The philsophy I work with is that out of 100 people, 10 of them will have the ability and the inclination to manage their own investments. They don't need my help. It's the other 90% who either don't have the inclination or the ability (or both) that I can help. Human nature is that left to their own devices that 90% will do either nothing or the bare minimum (eg. super).
So find someone who advises on both property and shares.. simple.
You have your bias on property, whereas a planner may sell you some other tax minimization products which produce the same end result. Did you ever stop and think that your the one with blinkers? and cant see past property?
Property isn't be all end all..
Exactly.. the financial planner would ask the client what their objective is, and if its to buy a home, they will draw up a plan to achieve that goal.
Yes but at least if you go to a holden dealer you know they are selling...wait for it... holdens!! and you don't pay them a fee as a professional on what the best car is to buy. people go to financial planners (and many of them are not obviously linked to a bank or an company eg IAG) eg they work out of an officed called Financial Planning is Us, thinking they will advise them on whatever is the best investment for their investing profile. You just seem to be missing my point and that is the general public think a planner will recommend ANY investing product that best suits them, the client.
According to www.comparefunds.com.au there are over 500 managed funds on offer in Australia.
There are perhaps many more not featured on that site.
In addition there are other investing options including bonds (any number of issuers and expiry dates) and cash and at call accounts (again, any number of issuers).
Many FPs also offer advice on insurance (life, tpd, income, trauma, etc) (again, how many issuers??)
In your mind, should an FP know everything about all of these, as well as having their head around IPs?
Petal, I highly doubt people will think that the financial planner will offer everything under the sun.. you can ask the planner what type of investments they sell, and I'm sure the planner will answer the question.. they would be a colonial outfit, AMP outfit, they obviously will sell what colonial, AMP, macquarie etc sell.
I think your barking up the wrong tree. but each to their own..
I think your barking up the wrong tree. but each to their own..
exactly.. sure there will be SOME planners which specilize in property, but they may not do insurance... so if your after property advise, then get a planner which DOES property.. simple..
each planner will have their own investment style, and this style needs to be what your after, and if its not, go elsewhere..
here is a outfit which does everything including property..
http://www.freemanfox.com.au/
so don't say they dont exist.
http://www.freemanfox.com.au/
so don't say they dont exist.
You are just making it clearer that you are missing the point. Thanks.
We are not talking about ourselves or others with a broader understanding of different investments.
More so people getting started who would fairly assume that a Financial Planner would offer and explain the benifits of IP's.
Please dont take this as disliking FP's. Far from it; however we all like IP's dont we!
I like IP's!
Mark
Mark
i think most of you that are advocating "go see someone else" or "just walk out the door if it doesn't suit" forget that we who are financially literate and understand the various forms of investing forget that the other 80-90% of the population doesn't have a clue - and go to an "expert" expecting that expert to look at their situation and give them the right advice.
they trust the expert - instead of questioning - because they don't realise there is anything to be questioned or that there are other options beyond what the expert is recommending to them.
they trust the expert - instead of questioning - because they don't realise there is anything to be questioned or that there are other options beyond what the expert is recommending to them.
Lizzie, if you walk into the first car dealership, and buy a car, and don't bother to shop around, and then get upset the car dealer didn't sell you the 'best' car, then who do you get upset at?
Its up to you to research the investment style the planner uses, and then choose what suits you. Same goes with ANYTHING you buy.. there will be good planners, there will be bad ones.. some will be aggressive, some will be passive.
IP's don't suit everyone.. and would be considered far more aggressive than say a simple share fund.
Not everyone goes to see a planner to become a multi millionaire.
Its up to you to research the investment style the planner uses, and then choose what suits you. Same goes with ANYTHING you buy.. there will be good planners, there will be bad ones.. some will be aggressive, some will be passive.
IP's don't suit everyone.. and would be considered far more aggressive than say a simple share fund.
Not everyone goes to see a planner to become a multi millionaire.
Similar threads
