Financial Planners and direct property investment

[charttv]

Does anyone know of a financial planner that recommends direct property investment? From what I have seen, most financial planners tend to ram managed funds and insurance down most people's throats as this is where they earn their commissions.

Yes, I am aware of the organisations that masquerade as pseudo financial planning organisations that are fronts for the flogging of overpriced off the plan stuff but are there any genuine organisations that will create a plan that consists of direct equities, managed funds as well as the purchase of investment properties?

 

[The Y-man]

Charttv,

I have always wondered about the financial viability of such a service.

Out of curiosity, what would you expect as a service from a FP on a residential IP front? For example, would you expect them to recommend a suburb to buy in, the exact type of property (eg unit, house, farm, commercial, development), or would you actually expect them to source (or put you in touch with someon to source) properties?

Cheers,

The Y-man

 

[alexlee]

Wouldn't that just be a buyers agent?
Alex

 

[charttv]

Charttv,

I have always wondered about the financial viability of such a service.

Out of curiosity, what would you expect as a service from a FP on a residential IP front? For example, would you expect them to recommend a suburb to buy in, the exact type of property (eg unit, house, farm, commercial, development), or would you actually expect them to source (or put you in touch with someon to source) properties?

Good question. In an ideal world I would expect them to demonstrate the mechanics of purchasing an investment property and encourage the client to source properties to their criteria themselves which is incredibly idealistic.

Realistically, I would expect them to send a client in the direction of an agent and/or finance broker that they had some existing commission arrangement with. Possibly, a step up from this would be if the FP referred a network of agents to increase the depth and variety of listings that would be offered by the agents.

 

[The Y-man]

Good question. In an ideal world I would expect them to demonstrate the mechanics of purchasing an investment property and encourage the client to source properties to their criteria themselves which is incredibly idealistic.
.

Done by seminar companies at present.

Realistically, I would expect them to send a client in the direction of an agent and/or finance broker that they had some existing commission arrangement with. Possibly, a step up from this would be if the FP referred a network of agents to increase the depth and variety of listings that would be offered by the agents.

Also done by seminar companies at present.

Cheers,

The Y-man

 

[Amanda Huggnkis]

Timely as i was just reading Paul' Clitheroes book 'Making money' that i got for free with my subscription to Money Magazine this minute and had come up to check on this web link: www.fpa.asn.au

my thoughts on this and requirements are that a FPA would be able to:consult on a balanced folio mix and help plan out the best mix of bricks and mortar, shares, listed property trusts, super advice to maximise benefits, and managed funds with a balanced unbiased approach to all as just asset class mixes as one tends to be myopic and only term best/or look at what we are most comfortable with ie the shares/property either or approach.
For me liquiditity to weitght and balance is very attractive.

 

[pieman]

try this...

http://www.somersoft.com/forums/showthread.php?t=38208&highlight=melbourne+accountant

 

[Dazz]

Does anyone know of a financial planner that recommends direct property investment? From what I have seen, most financial planners tend to ram managed funds and insurance down most people's throats as this is where they earn their commissions.

If that's the case.....why are you seeking their recommendation / approval ??

Is it a lack in your confidence, or are you looking to sue someone if their recommendation goes belly up, or is it something else.

The only reason you pay these FP's a fortune to talk to them is they accept a minimal amount of exposure (their solicitors word the contract between yourself and them specifically to limit their exposure as much as legally possible, and ipso facto expose you as much as possible).....so suing them won't get you very far.

You saw the result of the finance broking scandal here in Perth. After dragging FPs, lawyers and brokers through courts and appeals, I think they got about 30c in the dollar after 10 years or so, adjusted for inflation they probably got close to 15c in the dollar back. Legal avenues of recourse didn't work for them against FP's, and they won't work against FP's for you either.

Why not have a chinwag with experienced PIers like you are already doing, combine it with your experience levels and knowledge already and just get on with it.

 

[charttv]

If that's the case.....why are you seeking their recommendation / approval ??

Is it a lack in your confidence, or are you looking to sue someone if their recommendation goes belly up, or is it something else.

I have no intention of ever seeking advice from an FP. My experiences with the industry have been mostly negative. I wasn't looking to shift liability in case things go belly up. I just wanted to throw it out there and see if someone was doing it.

Why not have a chinwag with experienced PIers like you are already doing, combine it with your experience levels and knowledge already and just get on with it.

Haer, hear. Your posts have been a goldmine of info Daz and have aided in the evolution of my investing strategy.

 

[The Y-man]

I have no intention of ever seeking advice from an FP. My experiences with the industry have been mostly negative.

That's interesting. I seek advice from my FP at least once a year. While he wouldn't outright tell me to go and buy more residential IP, he would not tell me to go and sell them all off either.

Basically, it is a parameter within our financial structure that he needs to take into consideration when drawing up our plans and recommendations with regards to things such as insurance, super, tax, shares and managed funds.

Cheers,

The Y-man

 

[natmarie73]

What about Navra Financial Services? Don't they advocate property for CG and shares for income to offset IP neg gearing?

 

[JIT]

I have no intention of ever seeking advice from an FP...

I had the same view until I met with a few very good financial planners, all are fee-for-service only and don't accept any commissions. Seeking out these sorts of FP's is a good starting point. I think as your strategies get more complex, their advice can be invaluable, even if you think you know everything (like I sometimes do ), so don't write them off completely. They can look at your financial situation more objectively than you and from a different perspective, which can be very helpful.

 

[wylie]

Have to be careful even of the "fee for service" planners. We went to one about ten years ago when I was wanting to resign from my job (even though I had not worked for several years by that time) because we wanted to see if we were heading in the right direction.

We assumed that by finding a "fee for service" financial planner (hard to find ten years ago!!) they would look at our situation objectively and not just tell us to sell our IP and buy a product.

Silly us. Even after them asking us everything, and us telling them we are risk takers, they still suggested selling our IP, paying out our housing loan and buying a product. It would have left us with a house and $50K in a "product".

I believe a financial planner with IPs is the way to go. We know one personally now as a friend, though we have never discussed our situation with him. Pity we didn't have him next door back then.

 

[JIT]

I believe a financial planner with IPs is the way to go. We know one personally now as a friend, though we have never discussed our situation with him. Pity we didn't have him next door back then.

That's true, the fee-for-service planners I've contacted aren't as keen about property as I am, and generally are more cautious, but you just need to keep this in mind when you're talking to them.

I haven't found one who is also a very keen property investor too.

I mentioned in another post that I think the ideal 'investment advisor' would:

(1) have qualifications as an accountant
(2) have qualifications as a financial planner
(3) be fee-for service only and accept no commissions (or rebate them fully to you)
(4) be a keen property investor!

There's guys out there that meet the first 3 criteria, but the 4th too is harder to find...

 

[wylie]

Our friend is all of these (but not sure if he is fee for service or not).

Left accounting to be a financial planner and has IPs of his own.

Perhaps a rare breed?

 

[s_t]

That's true, the fee-for-service planners I've contacted aren't as keen about property as I am, and generally are more cautious, but you just need to keep this in mind when you're talking to them.

I haven't found one who is also a very keen property investor too.

I mentioned in another post that I think the ideal 'investment advisor' would:

(1) have qualifications as an accountant
(2) have qualifications as a financial planner
(3) be fee-for service only and accept no commissions (or rebate them fully to you)
(4) be a keen property investor!

There's guys out there that meet the first 3 criteria, but the 4th too is harder to find...

Yep, I have relative who meets the first 3, but not 4. yes, a property investor, but not keen! Very conservative basically.

Should keep in mind that many fee-for service FP'ers aren't only fee for service - they are fee for service plus commissions/rebates!

 

[JIT]

Our friend is all of these (but not sure if he is fee for service or not).

Left accounting to be a financial planner and has IPs of his own.

Perhaps a rare breed?

Yes, I would think so.

The FP's I've met do have IP's too, but see it in a broader perspective as part of their overall portfolio and advise their clients in this manner too (which is perhaps expected though, otherwise you might think they're tring to 'sell' you property!)...whereas I see it as an essential 'bedrock' or foundation for my future wealth and other investments, and am leveraging up to my eyeballs with it!

 

[JIT]

Should keep in mind that many fee-for service FP'ers aren't only fee for service - they are fee for service plus commissions/rebates!

Yes that's true, I was talking about the fee-for-service + no commission/rebate variety.