Financial Plan

[MF35]

I did some research looking for Financial Planners who charged on a Fee Only basis and independent of the investments they recommend. There aren't many but found one that claimed to be. I made initial inquires with them explaining that I'd be seeking advice across a broad range of financial issues / areas but stated that IPs would likely make up the majority of my investments. I explained I would seek advice re the benefits of superannuation, shares etc in comparison to IPs in case they could be used effectively in conjunction with IP's.

Although they did seem to give indpendent financial advice (at face value anyway given I didn't use them) they were not interested in taking on customers who wanted property as a major component of their plan. They simply indicated they believed other investments performed better and pretty much brushed me off.

Given they wanted $5500 p.a. as the up front fee plus some extras depending on what you wanted from them, and they wouldn't consider IPs as part of the plan, I didn't exactly pursue them.

I'm thinking it's better to just source your own professionals in the required fields (Accountant, Insurance Broker, Mortgage Broker, Solicitor, Tradies etc etc) and educate yourself enough to make the decisions taking into account their advice (Similar to what some have already said). I would consider some IP / Investment related advice / coaching with a view to enabling me to be confident I was on the right track though. Getting the wife to authorise such expenditure would be a big hurdle though!

MF

 

[Mr. Fabulous]

Before coming to work for Steve, I saw Navra Financial Services as part of my 'team' of advisers. I've always made my final decisions ultimately, but like I've said in a previous post, I always always always go to my advisers to well.... advise me on my options.

I can say that for myself personally, I wouldn't even consider not having Navra as part of my 'team', whether I'm employed by them or not. Even now I ask for advice from the people I work with on decisions I want/need to make.

I've never understood the 'do it all on my own' ideal. I've gotten hundreds of thousands of dollars worth of info (if not millions) from the people in my team, info I probably wouldn't have if I didn't have a team, mostly because I wouldn't know where to get it from.

I find for myself that when I ask a question of my advisers, three more come up. It's a case of 'I know what I don't know'. I agree that most advisers out there are pathetic at best but to me, taking the time to find the right people increases your chances of wealth creation exponentially.

Would I be where I am today without having a financial advisor on my team? Most likely not even close. It's all the time I've spent talking to them and getting advice and information that has helped me make the decisions that have helped me get to where I am today.

Just as an aside.... anyone that goes to a financial planner without doing research on them and just gives them money to 'invest' and walks away deserves the (usually pathetic) returns they get.

Mark

 

[willair]

Just as an aside.... anyone that goes to a financial planner without doing research on them and just gives them money to 'invest' and walks away deserves the (usually pathetic) returns they get.

Mark,
i can understand why you might be critial of other F/P,but not everyone
delivers exactly what we want every single time ,you and your team
might,Who do you work for mark..
good luck
willair.

 

[Mr. Fabulous]

Before coming to work for Steve, I saw Navra Financial Services as part of my 'team' of advisers.

Will,

That's the first sentence of my post.

Regardless of whether I worked for NFS or not, I'd still be saying that people who went to a FP, hand over their money without doing any research, said 'invest this' and walked away deserve the returns they get. In fact, I've said it before a number of times, pre-NFS employment.

Mark

 

[willair]

Mark,
yes i guess everyone has a picture of how you want your life to be,
all it takes is time,and a ton of luck.......
good luck
willair......

 

[The Y-man]

How much have you increased your net worth over the last 5 years, as opposed to those who voted YES.

I answered YES.

Our net worth (not including super) is 5 times what it was 5 years ago. What is interesting is that the growth over those 5 years has been relatively constant.

While our original projection was for increasing rate of growth, our property protfolio has been relatively quiet for the past 2~3 years.

On the other hand, the fact that the growth rate has been maintained, is due mainly to diversification into other markets - primarily shares, but also to derivatives and various managed funds.

I feel that we would not have had the diversity of investment elements without the information from our FP.

Cheers,

The Y-man

 

[redwing]

How would you assess a Financial Planner Mark??


At aussie stock forums one of the members had an intersting signature which read something like.."do not take the above as advice, if you seek professional advice you should speak to a financial planner, who amongst other things knows the benefit of a trailing commission"

Pretty much sums it up in my opinion..in saying that though, if a FP can make above and beyond his fee plus what you could get via normal methods such as on-line accounts etc then great..(maybe I'm stillsensitive about paying fund managers for charging me money to make my 'not so super' go backwards a few years back )


REDWINGF

 

[redwing]

I previously worked as an Advisor for a four pillar company and was pissed off that it was "sales" oriented - sell our product rather than rational advise... so much so i left 6 months after getting my dream job in this industry..

I have continued my study in this area as i believe it is an area i truly enjoy. But really - if you want an "adviser" i would not speak to anyone who is dependant upon upfront commissions and trailing fees based upon your funds invested.

To be a true adviser i think you should be on a performance fee commission. ie you achieve higher than a predetermined level, reviewed annually, and not just specialise in packaged investment products.

Recently, I looked into a firm franchising it business by appointing financial advisers and wealth creation managers and frankly was dissappointed how this person had sold out and conformed to the normal mould of a "standard financial planner",...like opposite end of the spectrum from when i saw this person first talk about the financial management industry... now this person was conforming to the industry as there was a huge business-potential to it.

Scares me when a guru who i idolised had a "do it my way" methodology conforms to the general population.

Sometimes i hate this industry... other times it really makes me want to break the mould and realise some opportunities

OSS

Great Post

PS- I think I know who you mean..

 

[Mr. Fabulous]

redwing,

I base the value of my financial planner on the performance they achieve for my investments. I am willing to pay for good advice. In relation to financial planning, whether that means commissions or up-front fees doesn't really matter to me. Let's keep in mind here that people are running a business, not a charity.

At the end of the day, what matters to me is the bottom line. Pure and simple. I pay my advisers to help me grow that bottom line. Let me tell you redwing, I am one happy chappy.

It really does make me laugh when people balk at commissions. Seriously. It seems that so many people want something for nothing. When you pay your fp, you aren't simply paying for someone to tell you which investment to put your money into. You're paying for on-going service and advice. There's a lot going on behind the scenes that people don't seem to be aware of.

If people get shafted by their planner, it's (usually) because - again - they haven't done their research and haven't chosen a planner that will optimise their investment structure. But hey - it's all the planner's fault, right? I'm not at fault - they're supposed to make me money!

If more people took responsibility for their investments and took a more hands-on approach, a lot of these shysters would be put out of business - and rightfully so - because they'd be weeded out fairly quickly. Unfortunately 'personal responsibility' seems to be a foreign term to most people. As long as that is the case, these jokers will continue to prosper.

Mark

 

[redwing]

Your probably right Mark, a good FP is worth their weight in gold..the problem is finding one- I'd guess personal recommendations from other investors would be the best.

You only have to get burnt a few times before you dont wanna touch the fire again.. I'd guess thats why the HUGE growth in DIY Super, people are sick of the FP Shysters.

REDWING

 

[Buzz]

Nope

Misguided me I decided to pay for an 'independant' FP for independent advice- being an engineer I saw 3 at $500 each.

After I told them I had $40k and wanted advice on property vs shares - 2 put together managed fund portfolios for me and the last wanted me to deposit cash into his account so he could day trade for me.

I did nothing - tracked the 2 portfolios for 6 mths ( I know long term and all) one had me $400 ahead the other neutral. Hence I decided I would do the Fin Planning Assoc course myself - DFP1 down and having been told for 8 weeks after work as FP's our job was sales and risk profiling not clever planning I bailed and bought a house and did it up and refinanced 6 mths later pulling $150k out, bought another one.... you know the story - 5 years on started my own business in property finance strategies and loving it.

Buzzz.

 

[Garry K]

......bought a house and did it up and refinanced 6 mths later pulling $150k out, bought another one....

Buzzz.

Hi Buzz

You have highlighted a valid point.
An FP couldn't recommend you do what you did. To many unknown variables eg your skill at renovating, skill at negotiating the purchase at the right price etc.


I think too many people think FP's have some magic bullet. Much of it is common sense, once you know how all the components link.


GarryK

 

[on the move]

I am glad other people have the same experience with financial planners - they are a waste of time, and money ( sorry to those good planners, if they exist, but I have not found one). Just been to one, actually 2, they always come in pair, today and they make me depressed. Property investment is a big no no, "what if the interest rate goes up, what if the house price go down, what if nobody rent your property. Come back to us after you sell your properties and invest in managed fund". My question is if they are so good why they still work for a wage ? I saw a few in my lieftime, 2 are straight salespeople for a property co flogging apartments, 2 are retrenched bank workers who took couple of months financial planning course or something. For any good planners in this forum, hands up if your net worth is more than couple of million $ and if you built your equity through property or share.

 

[Peter 14.7]

. For any good planners in this forum, hands up if your net worth is more than couple of million $ and if you built your equity through property or share.

Sooooo True!!!

Case in Point...

I often read the page in the weekend Financial Liftout which features some managed fund manager, tipster guru, options expert ( cough, sorry choking on my weeties).

Anyhow after telling all and sundry how great they are and they predicted this and that and have $MMMM under management they get asked:

1. do you have a mortage?

2. do you have IP's?

So far all the ones I have read have replied as

1. "umm yes but paying that down is not a priority for me....."

2. "umm no but the market is poor now so that is not a priority for me....."

Since when is paying our bad PPOR debt not a priority?:r
And what about diversififcation.
And have you only been investing since 2003?

Even the famous Bernaud Salt admitted he had NOT invested in IP despite predicting the boom?!?!?-

I listen to advice from those how are doers not gunnas.

Peter 147

 

[Mr. Fabulous]

Okay.... not *quite* a milionaire yet, but getting there! Hey, I've only been investing for five years on a very limited income. Do I 'walk my talk'? Yes, of course! While I don't actually advise clients - I'm the paraplanner for the Brisbane office, I don't make recommendations in clients plans that I wouldn't make myself. That is, I put myself in the clients shoes and ask myself 'If I was X, would I want to do this?' if the answer is no, I look for another solution.

However, I can tell you that my boss is a millionaire - many times over. He also 'walks his talk' and does all the things he recommends clients do too. That's why I asked him for a job, cause in my mind he's one of the few people I have come across in this industry is honest and a straight talker.

Mark

 

[WillG]

Hi Mark,

Its great to hear somebody who is happy with their financial advisor.

Although I haven't used a financial advisor yet, I believe that a good financial advisor 'who walks the talk' and who atempts to put himsef in your shoes would be an asset. You are probably in a unique situation because your financal advsor is an entrpeneur and probably thinks very differently to a 'run of the mil' financial planner

Just some questions about your experience.
1. Has your financial advisor helped you develop a better 'investing' mindset ? I suspect the answer is yes. Can you give examples ?

2. Has your net wealth grown to the proportions you initialy wanted when you first went to your financial advsor ?

3. Has your financial plan changed a lot since you first saw your financial advisor ?

Cheers

 

[Mr. Fabulous]

Hi Mark,

Its great to hear somebody who is happy with their financial advisor.

Although I haven't used a financial advisor yet, I believe that a good financial advisor 'who walks the talk' and who atempts to put himsef in your shoes would be an asset. You are probably in a unique situation because your financal advsor is an entrpeneur and probably thinks very differently to a 'run of the mil' financial planner

Just some questions about your experience.
1. Has your financial advisor helped you develop a better 'investing' mindset ? I suspect the answer is yes. Can you give examples ?
Yes they have. I worked with Steve, but mostly with Katrina in the Melbourne office. Examples are that Steve taught me that using more than one asset class (shares, property, cash) was preferable to using only the one (in my case property).
Katrina also helped me to progress my investing mindset simply by my being lucky enough to spend some 'casual' time with her outside of the office just chatting about investing and our experiences.

2. Has your net wealth grown to the proportions you initialy wanted when you first went to your financial advsor ?
My net worth has stagnated a little bit in the last twelve months or so, but this is due more to decisions and issues I have made/experienced than anything else.
Purchasing more shares in NavraInvest, moving to Brisbane and my brother getting married in NZ in the space of twelve months have taken their toll financially, although I expect the shares purchase to pay off in the future.

3. Has your financial plan changed a lot since you first saw your financial advisor ?
Yes, I find that my plan is constantly changing. I've never had a formal written plan - that is, one written for me by an advisor as I've not needed it. I find it changing even more so now that I eat, breathe and sleep investing - I've learnt more inthe last six months than I did in the first four years or so combined.
Cheers

Hope that answers your questions Will. If you have anymore, feel free to ask.

Mark

 

[alwayscurious]

Yikes.

I talked to a previous fin advisor.

Previously this advisor had advised not to buy a investment house (in 1999, in Brisbane) and had advised me to invest all my cash with him.

I invested some with him and it did OK but not as good as if I had trusted some of my gut instinct and bought a place. Ahh well.

I said:
I would like some shares / managed funds that can be bought in a trust with corp trustee. The return needs to be consistently 8% or better and have growth as well.

The financial advisor said: First we need to prepare you a plan $2200.

Yuk. I said:
I am happy for you to take a trailing commission if you find me a good fund / share combination but am unwilling to part with a lump sum straight up front with no guarantees.

In my opinion that is too risky.

Anyway - it helped firm up my decision(s).

Out to look at property this weekend.

Have a successful weekend!!

Cheers A/c

 

[The Y-man]

Just some questions about your experience.

Might just add our experience with our planner here too

1. Has your financial advisor helped you develop a better 'investing' mindset ? I suspect the answer is yes. Can you give examples ?

Yes. As well as the "run of the mill" planning stuff, the company runs courses on investing, mindset etc

2. Has your net wealth grown to the proportions you initialy wanted when you first went to your financial advsor ?

The planner gave us some likely scenarios. We had our own range of expectations, and there was basically no big divergence between our respective objectives.

As to the plans and reality, we have had several interesting outcomes over the past 2-3 years:
1. We are ahead of target in asset allocation rebalancing (from being almost exclusively residential ip to being more diversified)
2. Our net worth has not grown as much as anticipated in the "best case" scenario due to the property ease off in Melbourne
3. Our net worth has grown better than we other wise would have, due to the advice taken to move into other markets

3. Has your financial plan changed a lot since you first saw your financial advisor ?

Yes. The objectives have altered, and with it the plan has had to be revised.
Our objectives have broadly changed as follows:
capital gain / tax minimization -> investment income generation -> tax minimization


One thing I observe is that the same planner can be perceived as extremely useful by one person, and completely useless by another - and this probably comes down to your (the client's) expectations and requirements.


Cheers,

The Y-man

 

[young_gun]

I am currently studying a diploma in financial planning , and I would say that someone charging that type of money isnt worth it , unless you know they are worth every cent (which is likely you dont since the post). What I mean is if you have heard word of mouth or know people who have greatly benefited from their services.

To tell you the truth the majority of financial planners are only keen to flogg a product like a managed fund to people with little or know financial literacy. Granted you have an idea in how to manage your finances and can do indepedent reareach chances are you dont need one .

The most valuable thing a planner can do you is develop a stratergy but often most stratergies drafted in the statement of advice (SOA) are really generic and little time is taken to develop a unique plan for you , besides some little modifications.

In my mind you would be better do your own idea of what investments you want to invest in and then see a specalisit so they can draft an indepth stratergy. Most of the time when you go to a financial planner they try and work out wat investments are good for you , or your risk profiles and your taxation needs , liquidty needs ect ect .. If you can figure this out for yourself and decide you want to invest in property I would visit somone who is a property specialist because they will be using their speciliased expertise to give you indepth help , not a generalised look into all asset types .

Although im sure their are exceptions and phenominal planner out their , chances are you will need to do alot of research to find one. Just my 2 cents worth ..