Financial Planning fees

I know that many of you don't use/don't approve of or haven't found a FP you are happy with; but I've found a FP that I'm comfortable with and am in the process of doing my DD but am having problems determining/benchmarking the cost. I will seek out a 2nd and/or 3rd planner to benchmark myself, but obviously that's not something that can be done today; so I'd thought I'd put it out there - what do you pay for your FP?

The FP we've found is comfortable with PI, and doesn't use commission based products.

The main reason we are looking for a FP is because we are inexperienced in the share market, are time poor, and have reached that point in our life where we need to diversify our portfolio but can't do it ourselves.

So; what do you pay for your FP?

Cheers
Buddybee
 
Hmm, if you are time poor now enouugh to have to use a planner, what is your plans to being less time poor later (ie retire).
I'd invest some more time in information and education before committing to a planner. Experts are very helpful, if you are educated enough to know the right questions to ask. If you are just using a planner becuase you think you need to 'diversify', I'd be doing a little more research on where that diversify idea comes from.....

Very few planners can disengage wholly the commissions paid to wrap platforms etc that are paid to handlers of investments, and necessarily only using products that can be disengaged limits your investing options.

Whatever the cost of the planning itself, the fundamental idea is why shares? How is it you have enough time to worry about the need to diversify, but dont have the time to do your own research into the assets you want to diversify in?
 
I hear and to some extent agree with what you say tobe.

Shares is poor wording on my behalf - shares is one part of the equation, but not the entire equation. Prior to meeting the FP; hubby and I had spoken "generally" about a wide range of investments including adding 3-4 more IPs, Gold, metals, as well as a mix of Australian and OS shares. The discussions with a friend, pointed us to this FP, who has disclosed he has personally (or has had) assets in all of these classes.

As for the time poor comments, hubby and I work in our business, we also have 3 young kids. It is doubtful our industry will exist in 7-10 years; so soon on the horizon will be ALOT of spare time. Average planning today will allow us to be financially free in 7-10 years - good or great planning will be the icing on the cake. Diversification is important to us because of these timeframes.

I have spent ALOT of time over the last couple of years educating myself in a wide range of investments - reading forums, reading books, subscribing to paid research etc. Along the way I've hit analysis paralysis. My learning style is better suited to mentoring - watching someone else walk the walk, then apply it myself. In the short term we don't have time to do everything, but managing our investments long term is the goal. I see this as a learning opportunity - like finding a coach, not a turning my back, closing my eyes and hoping for the best.

When I, like a portion of the SS community outsource their Mortgage broking requirements, Insurance needs etc I can't see a reason why outsourcing FP would be any different; especially when I fall into that small % of people who actually read the fine print, benchmark deals, and qualify my understanding.

Cheers
Buddybee
 
Im not sure the analogy to Mortgage brokers is correct, (because brokers help you with a vehicle to buy an investment and FP help you buy an investment) but I see your point. If this guy is very good, then you should pay him comensurate with his service.
the analogy is closer to buyers advocates I'd say. as such I have sued a BA in the past, and found their service very useful. they made me a heap of return in relation to their fee.

NB the financial planning body have decided to outlaw commissions from 2012, so for now there is still commission paid on most products sold, fully disclosed in their paperwork.....
 
The main reason we are looking for a FP is because we are inexperienced in the share market, are time poor, and have reached that point in our life where we need to diversify our portfolio but can't do it ourselves.

I would strongly recommended ETF (exchange traded funds) if you are looking to diversify into the share market in a simple and effective way. These funds track the performance of a particular sector or market so they go up and down with the market. You won't over perform the market but more importantly nor will you under perform. The ongoing management fee is usually very low (less than 1%) and you can buy these on the stock exchange yourself so won't need an advisor. A lot of SMSFs use ETF as their core investment because they are simple and effective.

I can go on and on about ETF but I do realise this is not a forum for stocks! Do some simple research online. I remember seeing an article about it in the Money magazine recently, either the current issue or the last.

Good luck.
 
the first time he found me a property that I gave him the parameters for He found it just as it was about to be marketed by the estate agent, and we snapped it up on the spot. A flat in murrumbeena, that looked horrible, but really only needed a clean, some carpet and a paint, which we got early access for. The second time, he bought an old block of flats, and I bought one and along with the rest of the owners agreed to do up the outside.
Both have done very well capital growth wise, the second a bit better, as it was purchased at the peak of the doom a couple of years ago.
I dont always use a BA for purchases, but I have only had good experiences so far.
 
hubby and I had spoken "generally" about a wide range of investments including adding 3-4 more IPs, Gold, metals, as well as a mix of Australian and OS shares. The discussions with a friend, pointed us to this FP, who has disclosed he has personally (or has had) assets in all of these classes.

Why do you think you need such a wide range of investments? Isn't real estate and shares sufficient? You can buy the companies that mine the underlying commodities if you are inclined.

If you don't know anything about shares, invest in index funds - that way you are guaranteed to beat over 50% of fund managers after costs.

Also, just because someone has invested in all those asset classes it doesn't mean they are worth listening to.
 
What are you seeking in a Financial Planner?

Hi Buddybee,

From reading your post it seems that you may be better suited with a mentor than a Financial Planner as such.

I have spent ALOT of time over the last couple of years educating myself in a wide range of investments - reading forums, reading books, subscribing to paid research etc. Along the way I've hit analysis paralysis. My learning style is better suited to mentoring - watching someone else walk the walk, then apply it myself.

Have you thought about identifying a successful investor whose strategy resonates with you and approaching them to see if they would mentor you? There are a number of highly successful investors on this forum for instance.

In the short term we don't have time to do everything, but managing our investments long term is the goal. I see this as a learning opportunity - like finding a coach, not a turning my back, closing my eyes and hoping for the best..

There is copious information available on share investing. Regular newsletters are published by Huntley's for instance who provide recommendations and sample portfolios. The advantage of buying shares directly is that you don't pay commissions/fees. Over the long term this can add up to a huge amount of money.

If you choose to outsource your investments to a Financial Planner, make sure you review their decisions regularly and keep an eye on fees and commission structures.

My own experience with a Financial Planner hasn't been great. He put us into a wrap which cost us many thousands in fees. Fortunately for us we only stayed in the structure for a year before getting out of it. We have fared so much better since getting rid of our planner and taking responsibility for our own investment decisions. The main reason for our success so far was undertaking our own research and then simply taking action.

You don't need a planner to become financially independent. In fact, I think a Financial Planner can hinder the process!!
 
Thankyou everyone for your thoughts and opinions, they are really appreciated.

I don't know what path we are going to take, but you've all given me a number of options to consider that hadn't come up in our personal discussions.

Cheers
Buddybee
 
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