Financial Planners comparison

Hi Everyone,

I have been a little underwhelmed with the financial planners/advisors I have dealt with so far in life. I will share my experience/expectations and am interested to find out whether I am dealing with the wrong people or am expecting too much.

The first advisor that I dealt with wanted a 4% annual commission for their services (shares/managed funds investments) This was reduced to 1%. I thought this was strange to ask for 4 times what they were willing to accept.

The same advisor then recommended borrowing 3:1 using a margin loan to purchase managed funds. I was concerned by this level of risk and went for a 1:1 ratio instead. This was a few months prior to September 11. Had I gone 3:1 as advised I could have been in a bit of trouble with the subsequent market volatility.

Now I have an advisor who gets 1% again of the value of our shares. Because he doesn't get anything from our property investment there's a bias towards buying more shares. Now that we have got our mortgage under control and are considering buying some more shares I am sure he will be more excited.

We are interested in what others get from their advisers and what it costs them.

Do you have an accountant and adviser who work together to get you the best results? Do they advise on both property and shares? How do you pay them for property advice (ie a flat fee for the whole financial plan?)

We are based in Perth and would be interested in speaking with such an advisor/accountant combo over here who other readers on this forum are happy with. Otherwise, an interstate adviser/accountant would be fine with sykpe/emails etc.

If others are willing to share any positive or negative experiences they had with advisors I'd be very grateful.

Many thanks.
 
I'm no expert but by the sounds of it you should be speaking to a broker/accountant. Although I haven't used any services from forum members I have heard great things about some people on here. Jamie M, Redom, Corey batt etc.

Look up those names and they should be able to help you.
 
Why would anyone want to pay a percentage of the 'funds under management' is beyond me. I charge a fixed fee as it doesn't make any real difference in workload if you have $1mil in shares or $100k. And you are right, a bad planner may not recommend property if it doesn't benefit their earnings.
 
Many financial planners/advisors don't recommend property because it's a bit of a mine field for them - they can include it in the plan but buying the property itself is out of their hands - but their 'advice' leaves them open to getting sued if things go pear shaped.

They also don't/can't make any commission from property like they can from shares, so unless they're recommending OTP property (don't buy it!!) or doing the finance and getting commission from those avenues, it's hard for them to make a buck.

As Brian said, you might be best off using a broker for property and keeping your planner for the shares/managed funds side of things.
 
Hiya

What are you aiming to get out of a financial advisor?

Since you're posting on SS I assume you're interesting in property investing?

If so - prob best to align yourself with a good accountant, broker and if needed - a good buyers agent.

As other have said - a planner may not be the best person to seek property advice from. If they charge a fee for service it may be ok - because the advice "should" be impartial. If they don't - and they suggest off the plan stock, then they're probably putting their own financial interests before yours.

Cheers

Jamie
 
They also don't/can't make any commission from property like they can from shares, so unless they're recommending OTP property (don't buy it!!) or doing the finance and getting commission from those avenues, it's hard for them to make a buck.

Planner don't get commissions on shares or managed funds anymore. It was banned about 2 or 3 years ago.
 
Planner don't get commissions on shares or managed funds anymore. It was banned about 2 or 3 years ago.
Sorry Yes - I was talking about the percentage of funds under management. It's not called a commission, but sounds a lot like a trailing commission in reality though, doesn't it? !
 
I agree with Terry.

We charge a flat fee for a Full Financial Plan whether the clients have 70K or 700K to invest.

The risk appetite may change for different clients but no reason to be charged more for this.

Cheers
 
Only if you have no idea what a trailing commission was in financial planning.

I'm comparing it to the trailing commissions we get in broking.

Percentage of Assets under management is not so different to what we get on the remaining loan amount. Only ours is called 'commission' and is significantly less than 1%.
 
Thanks for the replies. I certainly see the merit in the fixed fee versus an ongoing percentage but I guess it also depends on the total cost.

It's great to hear from some of the SS financial advisers and mortgage brokers. I am what you'd call an accidental property investor.. Bought a unit as a PPOR, wanted to upgrade to a townhouse, then our son arrived and a house was required. So we bought each property as a PPOR to suit our needs at the time and held onto each one (until selling one last year). I can hear SSers shuddering already!!

It's worked out fine for us but we have never had someone advising us to "buy a 400k property in Adelaide" or anything close to that. My former mortgage broker certainly got us a good couple of loans but again was just advising on the best loan and structure given what we had at the time. My accountants have just done my returns after I gave them a thick pile of paper each year!

So the concept of a mortgage broker/financial adviser/accountant being the same person or working for the same firm and providing well thought out and tailored advice on both property and shares is a little foreign to me.

Basically we are now considering our next move in life (another IP or buy shares and compound returns) and we are willing to consider a change of leadership.

Thanks again for the informative posts and recommendations of SSers.
 
I looked at 'Required documents' from a financial planning company.

They asked for 100 point ID check. Is that really needed?
If they are not going to provide ONLY financial plan/advice then why do they need to do the ID check?
 
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