seeking finacial advisor

[old_picker]

currently looking at obtaining advice on mortgage, super etc etc my wife and i saw a guy last nite who's apparent source was from an online survey my wife completed in the recent past - we had people calling up yesterday from a country far far away to ensure we were going to be available for the appointment - he was a nice young guy in an expensive suit with excellent sales techniques -

he wants to charge us $650.00 to put together a plan that will help ensure a comfortable retirement - our financial situation could be better - i am suspicous as to what kind of economic voodoo he may pull out of his corporate grab bag of goodies to turn around, what seems to me, to be an impossible situation

i realise that to get the right advice, i need pay for the services of a pro... but who?? i have seen so many stories of people who have wrecked their financial future by trusting purveyors of shonky investment schemes

how do you get "independant" financial advice??

[Sturdee]

If the guy wants to be paid in US dollars I would also be very suspicious of him.

As far as I'm aware there is a registration process for financial advisors and also an industry body so I would contact them first to check the bona fides of the person concerned before I paid anything or relied on him.

You could also contact the 3AW afternoon program on Wednesdays when they have a finance section with Domenic Alafaci for his opinion and advice. Never used him but he seems sensible and independant with his comments.
Peter.

[The Bleeder]

Ray,

The big banks have them. Contact through the Customer Hot line.

Try AMP and others. They do not charge for the consultation. This way you can get an idea of what you need, the differences between them. Then you can discuss fees etc and go from there.

[TP1]

Hi,

I have been a partner in one of the largest worldwide accounting firms for the past 17 years and I can certainly sympathise with your dilemna. The issue being that most planning organizations, including banks, derive much of their fees from kickbacks from the investment funds and insurance products that they recommend. This does not mean that they all do not have your best interests at heart (there are some exceptions), but it means that you need to bear this in mind when evaluating the advice.

I think the situation today is better than before but some things I would recommend are:

1. Talk to a number of planners before making a decision. Treat it like shopping around for something. What you are looking for is gaining some knowledge about the issues and options that they will be considering as part of the solution . You don't have to know exactly what it all means but you also need to be comfortable that you can work with the person you will be dealing with .

2. Personally, I would avoid meeting with planners that use overseas call centres. In my experience these organizations pitch at a certain level of service and some have extensive kick back arrangements with the investments that they recommend. There may be nothing wrong at all with the advice that they give, but they churn out a lot of plans in a short space of time and i wonder if everyone is getting the service they need.

3. Ask the questions whether the planners will get commissions from financial products that they recommend. They will tell you about the disclosures that they are required to make by law, but their answers will also give you a better feel for the planner you are talking to.

In particular, be wary of anyone flogging insurance too hard. The emphasis is on "too hard" because all good planners should give the option.

Now that may incur the wrath of some but i am speaking to you as i do my mates - insurance companies give phenomenal kickbacks, particularly for life insurance which is probably the highest of all.

2. Do not be put off, you will learn very quickly and once you do select a planner, do not automatically accept the exact recommendations that are made. This will mean that you will need to pay for the plan ( Steer away from free plans, because as you would know by now, nothing is free.)

For example if a particular super fund is recommended, investigate yourself the type of fees etc that are payable to the fund and the planner. You can choose to go to another fund, which do not have these fees.

3. Finally i would add that it is a very good idea to plan for retirement and beyond. Reputable financial planners do add value and the decisions you make now will impact you for a very long time.

[artme]

My conservative nature tells me that you should steer clear of this bloke.

Have you talked to your local bank manager?they can be very helpful, but are not usually licensed to give financial planning advice.

Super funds are usually a good starting point to gain some background advice and they should be able to point you to reliable advisors.

[Waldo]

Old picker, I can recommend a good firm in Collins Street, Melb.

[TP1]

I should add that all banks have their own financial advice divisions. The bank managers are trained to refer all financial advice enquiries to the licensed planners.

[BobR]

It is almost impossible to get independant adivce. Most advisors are tied to a large financial institution of some description. Also, remember that they are basically salesmen on commission. They will only recommend managed funds, almost always in a master fund. This means additional fees where the main benificary is the advisor as reporting is made easy for them. They each work from a portfolio of about 20 - 30 funds as they can't track more than that. So a particular advisor will be restricted to a limited number of funds. So your choice of advisor will also determin which funds are recommended. Don't expect any advisor to put you into direct investments - no trailing commissions. As you may guess, I don't have a lot of faith in advisors. However, they are a necessary evel for some. I believe that financial advisors should be just that, and have no relationship with the products they recommend. Those who get kickbacks should be called something else. I shall now sit back and put on my tin hat and flack jacket.

[TP1]

I believe that financial advisors should be just that, and have no relationship with the products they recommend. Those who get kickbacks should be called something else. I shall now sit back and put on my tin hat and flack jacket.

I think even the Financial Advising industry is bracing itself for change. The Federal Government is considering whether to legislate to outlaw the practice of all commissions which would mean advisors would charge on a time basis only.

However it is the major institutions, banks, AMP etc that stand to lose the most. They have made an art form out of trailing commissions.

However the even bigger evil and the one that has caused many unsuspecting investors to be duped are the upfront commissions. In the past up front commissions could exceed 20% of the investment - some are going through the courts due to losses made. Life Insurance, although not in the scam category (officially) could see the first years premium at least being paid as commissions to the company that sells the product. Then there are attractive trailing commissions after that.

[rrobor]

Dont touch him with a barge pole, Not only does he want US dollars but you will allow him to be able to manipulate all your funds. Get him and your money is gone, and perhaps your house. All the large banks have bank backed advisors as someone else said so get someone who if he screws up or nicks off with your cash the bank that will pay you back and chase him. This guy will promise you the moon, why shouldnt he, he doesnt have to deliver.