Just been to a popular financial "adviser", very disappointed. As usual ask me to sell all my IPs in case the prices fall 30%, tried to flog me some managed funds, charge me tens of thousand $$ for a so called SOA (Statement of "Advice"). Just want to know what SSers opinions of FPs. Also many of them charge $300 per hr, do you think it's too much ?
Financial planners are a waste of money, and time
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Hi there,
I admit I have no use for a FP but they do provide a sought after service for those that want and need it.
I think the problem lies in the fact that people get confused as to what services a FP actually provides. If you want someone to advise you on what property to purchase, source a Buyer's Agent.
If you need someone to look at your finances and the way you have structured your portfolio - ask your accountant.
For those that like shares and need help financially in this respect, FP's can be extremely helpful. You need to remember that they are a SERVICE and a BUSINESS and therefore will need some sort of renumeration to account for this.
I know where you are coming from because I have seen two over the course of the past 12 years and have been disappointed in both cases. Even when I was advised by a friend that his particular FP is different etc.
You are also asking a question that will mostly get bias answers on a Property Investment Forum.
Regards JO
I admit I have no use for a FP but they do provide a sought after service for those that want and need it.
I think the problem lies in the fact that people get confused as to what services a FP actually provides. If you want someone to advise you on what property to purchase, source a Buyer's Agent.
If you need someone to look at your finances and the way you have structured your portfolio - ask your accountant.
For those that like shares and need help financially in this respect, FP's can be extremely helpful. You need to remember that they are a SERVICE and a BUSINESS and therefore will need some sort of renumeration to account for this.
I know where you are coming from because I have seen two over the course of the past 12 years and have been disappointed in both cases. Even when I was advised by a friend that his particular FP is different etc.
You are also asking a question that will mostly get bias answers on a Property Investment Forum.
Regards JO
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I think you'll find most financial planners won't "get" your investment property strategy, because it's such a small niche, considering the number of ways you can invest in property each has its own niche (cashflow, negative gearing, flips, buy and hold, subdivide, commercial, industrial, office blocks, land banking, development and so on).
... and that's just property.
Out of interest, why did you go to the financial adviser in the first place?
... and that's just property.
Out of interest, why did you go to the financial adviser in the first place?
The best way is to educate yourself... look at what happened to the investment strategy recommended with Storm financial
I think financial planners have a great place in the superannuation industry.
But to take advice from a commission based planner when it is not about your compulsory super funds is a bit dangerous. I would much rather pay the $300 fee and have all commissions rebated in order to have unbiased advice.
Your accountant could be just as useful, especially on asset allocation and structure...
I think financial planners have a great place in the superannuation industry.
But to take advice from a commission based planner when it is not about your compulsory super funds is a bit dangerous. I would much rather pay the $300 fee and have all commissions rebated in order to have unbiased advice.
Your accountant could be just as useful, especially on asset allocation and structure...
I have no problem with paying for valuable service. But I can see these people are not listening to what I have to say, seems their head is calculating how much they can fleece from you. I told him I should be okay with property, I just need someone (because I have enough on my plate with a full time job etc) to oversee my investments and advice on which shares to buy (get burned buying myself). And he started telling me to sell all my IPs and come back to see him in 6 months time, also saying my current share holding ($200K, it was $300K earlier) is not worth his while as he would charge me ten grand just to give me advice !!!! Leave a bad taste in my mouth. Another FP I saw last year said my property investment was totally rubbish, look who's laughing now. I gave up hope of trying to find a FP who provides a valuable service at reasonable rate, I decide to spend some time & money to educate myself.
That sounds rather expensive unless you have very complicated structures set up. Otherwise it should be more like $3K I would have thought.
I agree with what the others have said so far and add this:
You need a group or team of professionals to advise you properly.
A Financial Planner to help you with the goal setting / financial plan stuff (not just a commission based on that wants to sell you managed funds)
An Insurance Broker to cover your life, trauma, sickness & accident, IP / LL insurance, PI, business, Public Liability insurances etc
A Mortgage Broker to help you source funds from the best lenders that fit the purpose of your borrowings and future plans and structures you plan to use to acquire assets in.
A Lawyer to advise on all the legal aspects and advise on asset protection etc as well as create Powers of Attorney, Estate Planning - Testamentry Trusts, Wills etc and to check contracts on IPs you buy and so on.
An Accountant to set up all the structures (trusts, companies, trustee companies, SMSFs etc) and do the compliance work involved.
A Buyers Agent if you need assistance sourcing property to suit your plans
A Business Broker if you plan to buy a business etc.
A trusted Stock Broker who can execute your trades when and as you want.
It always concerns me when someone says they are off to their Accountant to get advice on what sort of property to buy, or off to their MB to see what kind of structure they should use to borrow money in.
Sure a long term professional in any of these fileds probably has some idea what you should be doing BUT you should always, always take professional advice from the professional/s required in your particular circumstance.
. Didn't help with them not loosing 25-30% in super last year!!
I think the best financial advise you can go to is people who have made money themselves. Some salaried "financial" planner is a waste of money IMO. If they were actually good at what they did, they would be on their way to financial freedom themselves. Best way is self education, or to talk to people that have many IP's themselves, etc.
Hey, I can do a 4 subject Diploma of Financial Services (Financial Planning), and become a financial planner myself.
I had a bad experience with a financial planner back in 2000, I was young, gullible and stupidly thought that a financial planner was supposed to have my best interests in heart. He signed me up for some tax effective investments which eventually lost me $25k, had the tax department after me, and caused allot of anguish in my relationship. While all this was happening the Adelaide property market was doubling something he didn't seem to take notice of as he couldn't make any commissions out of it.
But he did lose his licence for a year....during which he expanded into a nice new premises with about 10 staff. He did this using someone else licence so it was all above board while he did all the work behind the scenes.
My advice, use extreme caution if you see a financial advisor!!
But he did lose his licence for a year....during which he expanded into a nice new premises with about 10 staff. He did this using someone else licence so it was all above board while he did all the work behind the scenes.
My advice, use extreme caution if you see a financial advisor!!
A few thoughts:
OTM - it 'almost' sounds like he was trying to push you away - i.e. your portfolio wasnt big enough for him to want to take on.
Other:
If the banks cut MB commissions again - which is being rumoured - IMO you'll see MBs commence a higher degree of fee for service or they'll just reduce their service offerings.
&
people can always set up a SMSF and manage their super themselves.
OTM - it 'almost' sounds like he was trying to push you away - i.e. your portfolio wasnt big enough for him to want to take on.
Other:
If the banks cut MB commissions again - which is being rumoured - IMO you'll see MBs commence a higher degree of fee for service or they'll just reduce their service offerings.
&
people can always set up a SMSF and manage their super themselves.
Totally agree, just like a bald man tries to sell you the miracle hair growth lotion.
I think the FP industry has the same problem as the alternate health industry (or clairyvoyants, for that matter) you don't know who are fair dinkum and who are not.
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Thanks for all the replies. I think I know a bit about investment, but like my colleague always says "I don't know what I don't know".
"Spectre :
OTM - it 'almost' sounds like he was trying to push you away - i.e. your portfolio wasnt big enough for him to want to take on."
I guess his mentality is like someone submits a quote but doesn't think he will get the job. He appears on the radio regularly so I would imagine many pensioners etc will go to him and I believe my net worth is higher than some of these people.
"steveadl:
Follow up question on FP's regarding some comments made above - do FP's actually recommend individual stocks? I thought they just recommend different types of managed funds? I thought for individual stocks you'd have to talk to stockbrokers?"
I guess he just sell managed funds hence the excuse.
"Spectre :
OTM - it 'almost' sounds like he was trying to push you away - i.e. your portfolio wasnt big enough for him to want to take on."
I guess his mentality is like someone submits a quote but doesn't think he will get the job. He appears on the radio regularly so I would imagine many pensioners etc will go to him and I believe my net worth is higher than some of these people.
"steveadl:
Follow up question on FP's regarding some comments made above - do FP's actually recommend individual stocks? I thought they just recommend different types of managed funds? I thought for individual stocks you'd have to talk to stockbrokers?"
I guess he just sell managed funds hence the excuse.
I took my mother to see a FP early last year. She inherited some money and needed to fiddle with a couple of things and I didn't want the responsibility of advising her.
She didn't want to buy any property (has two of them) and didn't want to go into the share market.
I warned the planner that she was going to be a fee for service client i.e. he wasn't going to make any commission.
The first session went for about half an hour. He assesssed her risk parameters (very low) and we talked generally. She gave him all the info he needed.
Next session went for an hour. He had his Statement of Advice ready and did some stuff on the whiteboard to explain the recommended strategy. It was a simple strategy - start up a super account (and meet the work test) and then migrate this into a pension. Funds in super and then the pension were to be held in cash.
I explained it all to her and he took care of all the paperwork - there were a few things to sort out.
His fee was $5,000. And he's been in touch a few times to tell her about some interest rates she should take advantage of by moving the cash around.
I've been pretty impressed.
Scott
She didn't want to buy any property (has two of them) and didn't want to go into the share market.
I warned the planner that she was going to be a fee for service client i.e. he wasn't going to make any commission.
The first session went for about half an hour. He assesssed her risk parameters (very low) and we talked generally. She gave him all the info he needed.
Next session went for an hour. He had his Statement of Advice ready and did some stuff on the whiteboard to explain the recommended strategy. It was a simple strategy - start up a super account (and meet the work test) and then migrate this into a pension. Funds in super and then the pension were to be held in cash.
I explained it all to her and he took care of all the paperwork - there were a few things to sort out.
His fee was $5,000. And he's been in touch a few times to tell her about some interest rates she should take advantage of by moving the cash around.
I've been pretty impressed.
Scott
Often the answer to good financial advice is to use a fee-for-service planner - no commissions. The second step is to find one that knows property strategies very well. You MUST find someone with these two characteristics in my opinion or you are wasting your time and money. There are some business around like this...
Even if you don't want advice on property they must know about property to give you balanced advice. It’s like a Ford seller telling you the Holden's crap even though they don't know anything about Holden's.
Even if you don't want advice on property they must know about property to give you balanced advice. It’s like a Ford seller telling you the Holden's crap even though they don't know anything about Holden's.
I agree a fee for service based planner would have merit for some people who otherwise wouldn't do anything themselves.
I deplore the commission based financial planning industry - it is an incredible rort and IMO shouldn't be allowed to operate. At the very least they should be called something else - like "Managed Fund Brokers" because this is what they are. Too many people go to them expecting "independent financial advice" and this is not what they get.
They would be a waste of time for us. We much prefer to chart our own course with all the risks and rewards that brings - I would rather spend the money on books / self education / shares or IP research / due diligence on property deals / you get the drift...!
I deplore the commission based financial planning industry - it is an incredible rort and IMO shouldn't be allowed to operate. At the very least they should be called something else - like "Managed Fund Brokers" because this is what they are. Too many people go to them expecting "independent financial advice" and this is not what they get.
They would be a waste of time for us. We much prefer to chart our own course with all the risks and rewards that brings - I would rather spend the money on books / self education / shares or IP research / due diligence on property deals / you get the drift...!
What are you expecting from these people?
Most of them will be working till the old age pension, how can they tell anybody else to do different.
I'm sure there's a few good ones out there, but they are predominantly useless and a waste of money.
So that's the way they need to be approached.
Propertunity you forgot the babysitter to change your nappy.
Most of them will be working till the old age pension, how can they tell anybody else to do different.
I'm sure there's a few good ones out there, but they are predominantly useless and a waste of money.
So that's the way they need to be approached.
Propertunity you forgot the babysitter to change your nappy.
I voted total waste of money.
Why?
Look at who pays their wages.
They are not going to recommend a 20 year old 3 x 2 house on 1000 sq/m in a middle ring suburb because there is no trailing commission in it.
They might mention a brand new tract house out in Narre Warren built by Henley Properties or one of those crowds though, but guess why.
Why?
Look at who pays their wages.
They are not going to recommend a 20 year old 3 x 2 house on 1000 sq/m in a middle ring suburb because there is no trailing commission in it.
They might mention a brand new tract house out in Narre Warren built by Henley Properties or one of those crowds though, but guess why.
The adviser's paradox
One problem is that the people who know how to pick a good financial adviser are informed enough not to need one. (They can design their own strategy, using accountants or other speicalists as needed).
Conversely those who don't know how to pick a good adviser are the very ones who would most need one.
One problem is that the people who know how to pick a good financial adviser are informed enough not to need one. (They can design their own strategy, using accountants or other speicalists as needed).
Conversely those who don't know how to pick a good adviser are the very ones who would most need one.
i did not vote
I did not vote because a financial planner is a must for mum &dad investors, and great to get joe plummer to think about his financial future,
But not good for me as like most of us on SS we are all abit "out their" and most financial advisers are too conservative for the likes of me!
And why would i take advise fron a person that has a job?????
Now if that same person was laid back on a sun lounge and retired at 30 and his profession was financial advise, then i wouls listen , and very carefully.
I did not vote because a financial planner is a must for mum &dad investors, and great to get joe plummer to think about his financial future,
But not good for me as like most of us on SS we are all abit "out their" and most financial advisers are too conservative for the likes of me!
And why would i take advise fron a person that has a job?????
Now if that same person was laid back on a sun lounge and retired at 30 and his profession was financial advise, then i wouls listen , and very carefully.
Hiya
I feel this is a case of the good, the bad, and the ugly.
As has been mentioned, some people ( AKA the majority) benefit from planners, regardless of how skewed we may see their advice.
Average advice compared to no advice combined with inaction will always prove to be better.
On my older vehicles and boats I like to do my own mechanical work. That doesnt mean I dont need a specialist when the electronic fuel injected diesel goes funny.
ta
rolf
I feel this is a case of the good, the bad, and the ugly.
As has been mentioned, some people ( AKA the majority) benefit from planners, regardless of how skewed we may see their advice.
Average advice compared to no advice combined with inaction will always prove to be better.
On my older vehicles and boats I like to do my own mechanical work. That doesnt mean I dont need a specialist when the electronic fuel injected diesel goes funny.
ta
rolf
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