Property Financial Plans

How Much would you expect to pay for a thorough Property Plan?

  • I wouldn't pay a cent

    Votes: 57 58.8%
  • About $1000

    Votes: 29 29.9%
  • About $2000

    Votes: 7 7.2%
  • About $3000

    Votes: 2 2.1%
  • About $4000

    Votes: 0 0.0%
  • About $5000

    Votes: 2 2.1%
  • I am rich I would pay $10,000

    Votes: 0 0.0%

  • Total voters
    97
  • Poll closed .
Terry, I don't know if you have read 'The Property Puzzle' by Stuart Wemyss? I think this has the best examples of a property investment plan that I have read. I know his book helped me a lot.

Thanks Jingo, will pick up a copy - haven't read it.
 
I met a Financial planner. He spent about 2 hours talking about what we are doing and what we want to do etc.
I just received a 'proposal' saying that he would charge $2800 to prepare a Statement of Advice for the following:

- Cash flow Management including Investment Funding
- Debt Management and Limited Recourse Borrowing Arrangements
- Tax Structures including Self-Managed Super Funds and other Business Structures
- Superannuation Review and Strategic Action
- Pension/Retirement Planning
- Insurance Review
- Business Risk Management and Insurance
- Estate Planning and Family Succession Planning
- Investment Modelling and Advice
- Salary Packaging and Redundancy Planning
 
devank, what were you expecting? Compared to most financial planners, the fee proposed for all that appears to be fairly reasonable.

To be honest, I have no idea about what the fair cost is.

However, 3K is a lot of money. What if I already know? What if the advice is not useful to us?
On the other hand, what if I'm missing something? What if he can save that money by suggesting something better?

He is a qualified financial planner and qualified accountant. In the business for fifteen years providing financial guidance and tax planning strategy.

May be I can look at this way. If he adds value then it is worth the money spent. If not, well.... at least I can be happy that I'm doing reasonably ok.
 
Now that I think about your thread, I see about 3 different people to do what's on Devank's list. :rolleyes:

I think there should be a market for it, b/w $3000-4500. IMO it would need to be ongoing advice where you should be available to be called and be asked/or emailed questions etc as they arise over the year. Some in a professional capacity and some in an informal capacity. It might have to be in a somewhat mentor role?! Do you agree, or is that too time consuming?

IMO a good way to market it would be exactly like the so called "property spruikers" market themselves, but in this case you would be a legitimate finance professional. :p Maybe an initial consultation is free and if as some people think upfront payment is too much, maybe ongoing payments would be better (?!). I really think the marketing and selling of this is the key, in an initial min. 1.5 hour (?!) consultation as a detailed presentation with a few case study clients & disaster stories to get it over the line (A Current Affair style) :eek: I.e., John Smith could have saved x amount if he did x, we can do this for you etc.

I, personally remember when I started "investing" 5 or so years back and didn't know much, I spoke to my accountant for 2.5 hours and paid $500.00 to have a formal meeting for generic property advice, and took notes which were quite helpful and set me really on the right initial path. So I do see it as valuable.

I didn't see Asset Protection in the the list (unless that's covered under Risk) Also as it's going to be tailored advice, I think something additionally useful to any potential client would be - How to analyze a good property deal. This may be a key to the presentation. E.g., show 3 properties, run the sums and projections and then show 3 properties with sums you would gravitate towards and project the 3/5/10 years sums etc?! Then the client obviously finds what they want and you offer additional informal advice there.

Vixs comment - "How many clients do you really have time to provide that level of service to on an ongoing basis?" - based on what I've stated above would be a key if this was viable enterprise for you, in addition to price per client.

Is what I stated in the scope of what you were looking at? I hope I was somewhat helpful :eek:
 
Now that I think about your thread, I see about 3 different people to do what's on Devank's list. :rolleyes:
Sorry I should have update my list. I gave that based on the email attachment I received. Now I received the paper version and only the following are covered.
- Cash flow Management including Investment Funding
- Debt Management and Limited Recourse Borrowing Arrangements
- Tax Structures including Self-Managed Super Funds and other Business Structures
- Superannuation Review and Strategic Action
- Insurance Review
- Investment Modelling and Advice
- Salary Packaging and Redundancy Planning

Omitted ones are:
- Pension/Retirement Planning
- Business Risk Management and Insurance
- Estate Planning and Family Succession Planning

'Estate Planning and Family Succession Planning ' is kind of important to me. It is one the area where I don't have much knowledge either.
 
Now that I think about your thread, I see about 3 different people to do what's on Devank's list. :rolleyes:

I think there should be a market for it, b/w $3000-4500. IMO it would need to be ongoing advice where you should be available to be called and be asked/or emailed questions etc as they arise over the year. Some in a professional capacity and some in an informal capacity. It might have to be in a somewhat mentor role?! Do you agree, or is that too time consuming?

IMO a good way to market it would be exactly like the so called "property spruikers" market themselves, but in this case you would be a legitimate finance professional. :p Maybe an initial consultation is free and if as some people think upfront payment is too much, maybe ongoing payments would be better (?!). I really think the marketing and selling of this is the key, in an initial min. 1.5 hour (?!) consultation as a detailed presentation with a few case study clients & disaster stories to get it over the line (A Current Affair style) :eek: I.e., John Smith could have saved x amount if he did x, we can do this for you etc.

I, personally remember when I started "investing" 5 or so years back and didn't know much, I spoke to my accountant for 2.5 hours and paid $500.00 to have a formal meeting for generic property advice, and took notes which were quite helpful and set me really on the right initial path. So I do see it as valuable.

I didn't see Asset Protection in the the list (unless that's covered under Risk) Also as it's going to be tailored advice, I think something additionally useful to any potential client would be - How to analyze a good property deal. This may be a key to the presentation. E.g., show 3 properties, run the sums and projections and then show 3 properties with sums you would gravitate towards and project the 3/5/10 years sums etc?! Then the client obviously finds what they want and you offer additional informal advice there.

Vixs comment - "How many clients do you really have time to provide that level of service to on an ongoing basis?" - based on what I've stated above would be a key if this was viable enterprise for you, in addition to price per client.

Is what I stated in the scope of what you were looking at? I hope I was somewhat helpful :eek:

Thanks Impala67, this was helpful.

Asset protection is legal advice which I can provide as a lawyer, but I would probably keep this separate to any property plan - but I could provide as a separate document.
 
'Estate Planning and Family Succession Planning ' is kind of important to me. It is one the area where I don't have much knowledge either.

This is an area in financial planning that is sorely lacking. Based on my experiences, I believe that someone who specialised in direct property and estate planning would do very well as a financial adviser.

Many advisers just ignore it because they don't understand it. I used to work for a guy who gave some very poor advice to a client in relation to estate planning (not direct - it was about BDBN's). I gave him a laundry list of reasons why it was bad advice and offered some alternatives and his eyes just glazed over and he told me to write the rec's as he'd given them.

In that particular situation, we're talking about potentially tens, if not hundreds of thousands of dollars in tax savings had their structure been set up correctly. I can give plenty more examples, but that one is the biggie.
 
Sorry I should have update my list. I gave that based on the email attachment I received. Now I received the paper version and only the following are covered.
- Cash flow Management including Investment Funding
- Debt Management and Limited Recourse Borrowing Arrangements
- Tax Structures including Self-Managed Super Funds and other Business Structures
- Superannuation Review and Strategic Action
- Insurance Review
- Investment Modelling and Advice
- Salary Packaging and Redundancy Planning

Omitted ones are:
- Pension/Retirement Planning
- Business Risk Management and Insurance
- Estate Planning and Family Succession Planning

'Estate Planning and Family Succession Planning ' is kind of important to me. It is one the area where I don't have much knowledge either.


Devank, hope you didn't pay for the advice you didn't receive!
 
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I used to be a mortgage broker for a mortgage broking company focused on providing finance for multiple property investors or people who would like to be. After each new client meeting I would provide a property portfolio scenario for them along the lines of what terry is suggesting. I received no income for it other than the standard broker comms if a loan/s came out of it. Would've been nice to get something for it as they took a bit of time to prepare.
 
Devank, key question is who the FP works for and what commissions will they get if you take the advice given.
We paid 3K for a SOA from an "independent" advisor. This was to review our Insurance and Superannuation needs. The advice was to double our life insurance - and because my existing super fund was unlikely to grant that due to some cholesterol issues - transfer most of existing super into a brand new fund - 10K commission to the advisor as part of that. Plus trailing commissions.

We then got further insurance advice from a broker who when they ran our numbers (at least 800K life insurance each already and 0 dependents) he felt our needs were being met and no need to double the insurance.

Anyway it was a lesson learnt - even though they are independent and saying "fee for service" - they still seem to get commission depending on what they advise. So even with the recent changes to the advice rules I am not convinced they solve the problem of appropriate "independent advice".

At least with the new rules you should know what those commissions will be.
 
...I am not convinced they solve the problem of appropriate "independent advice".

At least with the new rules you should know what those commissions will be.

Agree with this, as have seen it with loan brokers. Like one of the quotes in my thread on SS about Investment Advice & Quotes that people have heard - "Humans will always betray you. Only trust the numbers". Harsh but true.

One can alleviate this with longer term relationships, which is what I assume Terry W would be trying to achieve with clients.
 
At least with the new rules you should know what those commissions will be.

1. Advisers are able to still get upfront and trailing commissions from insurance.

2. Even before the new 'rules' advisers were required to outline upfront and trailing commissions to you in the advice document.

3. Insurance is not a 'one size fits all' product. You can go to ten advisers for insurance advice and get ten different answers, all perfectly viable.
 
Terry,
For the clients who want a long term plan, I put a 10 year strategy together for them, about 80 pages or so and it outlines where they are now, what position they want to be in, and a strategy to get there. It takes around 8 to 10 hours to put together, I incorporate tax projections (I am an accountant by profession), advise on structure and ownership, net return models, lender selection and why and which order, LVR's, property price and characteristics they need to get the loan for the next IP etc.

I charge a fixed fee and for clients who then use my services to obtain a loan, I rebate the upfront commission back to them. Depending on the loan size and lender, they can be in front after settlement.

Clients have ranged from those who are starting out and know they need to do something but no idea how, or little time, to clients who have one IP but do not know how to finance a second let alone a third, to clients with 10 and run into lender issues of not being able to borrow further.

Not all clients want or need this service but it is a model that has worked and clients have built their property portfolios based on that plan. I get paid for the work I do, it is based on clients needs hence the offer to rebate back any up front commission as they chose the lender and property hence loan amount. I do not sell properties, I do provide property reports to help them in their selection process and due diligence. It is based on a buy and hold strategy.
 
when i was 25 or so, i had a decent savings of about 50-70k and Zero finacial education, i knew nothing at all. Internet banking was something i wanted to try so i could use bpay and not pay bills at the post office. When i went to the branch(CBA) to get an internet bank account set up, they saw my savings and usherd me to a little office to see some lady who was their financial planner. They asked me what i planned to do with the savings to which i said ill use it to buy a house one day, but couldnt afford to yet(DSR was to low).

Long story short they told me about "coloinal first state" and started pusing managed funds on me. I had no clue what managed funds are/were or why i would need them. She explained it a little. I said thanks for the advice ill have a think about it. She also told me to go and the book read rich dad poor dad.

Im glad she told me to read rich dad poor dad. I did and that book is where i first started to learn about concepts or ideas that were alien to me before. Over time i learned about shares, managed funds, property etc. Thank god i didnt get sucked into managed funds it was '07. GFC was the next year.

The major issue I have with free consults it that it ultimately forces the adviser to push people into products, structures, etc that arent necessarily suitable for them.

I would have to agree with this guy. Based on my experience. There is zero doubt in my mind. This statement is definatly true

Look into the way Birch and Keshab Accounting do their stuff. First consultation free, then $300/hour for mentoring/planning and then lead into other products.

I know lawers get a bad wrap when it comes to morals and ethics, the last thing you should be dong is adpoting a greed fueled stratagy like nathan birch has done. I would put morals and ethics high on your things to do list, especially when advising people that need their hands held. We were all there once.
 
Managed funds and most professional advisors are the biggest rorts. If you're wondering, go read the article about how the Mallesons tax partner lost $38m of his money from bonds that UBS helped him buy. UBS made $1m fees out of it, and the bankers who helped him are probably multi-millionaires.

The only useful advice people can give is legal advice, and I think if you targeted people with $6/7m+, there's a market there.
 
Delta I think you'd find that 80% of the people on this board and 99% of investors not on this board would benefit from some of the exceptionally informed and experienced mortgage brokers that hang around here.

Separating risk and exposure across lenders to ensure your portfolio doesn't become a house of cards due to policy changes or adverse market conditions isn't what your typical bank lenders or broker does. Making a plan for extending your serviceability one or two properties further isn't something that everyone can do or even understands.

Average Joe doesn't think that when he buys his first apartment that he'll be moving into a house in suburbia in 5 years with Average Jane, and that he should be putting his money in an offset and paying interest only on his loan. He just smashes down his home loan and then has to sell the home to set himself back up properly for future investment opportunities and debt structuring.

Average Joe doesn't know how big a part LMI plays in the purchase process when you don't have the cash or equity to stump up and avoid it.

All of these things are mistakes that otherwise well educated or informed people can and do make, and a chat with a proficient broker or property minded planner can set a lot of things straight.

Managed funds are a totally separate issue but the fact is that many fund managers do get the returns and out-performance that warrant a management fee. The fact that your local AMP aligned planner doesn't put your money in them, or that the XYZ Balanced Fund hasn't awarded them a mandate to manage their money, doesn't mean they don't exist.

On another note, on the recommendation of someone earlier in this thread I went and read 'The Property Puzzle' and it certainly simplified some property concepts that I previously thought I understood for a relative novice like me.
 
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