Have you lost faith in financial planners?

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Many people seek financial advice from friends, family and websites, instead of seeing financial professionals. Is this a reaction to recent scandals? Have you lost faith in financial planners?

It may not come as a surprise that the reputation of the finance and banking sector has been sullied by repeated rackets, constant corruption and instances of deceit, scandals and ethical breaches. But the truth is that not all financial planners are bad and we shouldn’t tar them all with the same brush.

Besides, YourLifeChoices has some great tips for choosing a financial planner, as well as expert advice on how to deal with a planner, including the questions you should ask, and the most common questions people forget to ask.

A recent study by the Financial Services Planning Board revealed that just 17 per cent of those surveyed agree that they are knowledgeable about financial matters. And around 19 per cent say they are successful at sticking to financial strategies and 22 per cent have confidence that they’ll achieve their goals.

Only 32 per cent have a written financial plan.

When it comes to financial advice, 68 per cent of consumers rate trustworthiness as the most important consideration, yet six in 10 don’t know whom to trust.

The most important financial matter for most people – not just retirees – is retirement planning. In fact, 50 per cent of those surveyed placed retirement planning as their top concern, followed by investment planning (38 per cent) and budgeting and debt management (36 per cent).

Other financial focuses include:

  • being debt free
  • being prepared for an emergency
  • owning a home
  • planning for retirement
  • managing their own finances
  • supporting others financially
  • managing investments.

World Financial Planning Day is about offering you the knowledge and resources you need to develop successful financial strategies and meet your money – and life – goals.

Possibly the most trustworthy source of information when it comes to researching financial planning is the Australian Securities and Investment Commission website. You could also try the Financial Planning Association of Australia.

Finding a financial planner you can trust may be a challenge, but a planner who understands your needs and goals and can help you achieve them is truly an invaluable resource – and one that can help you take control of your financial life.

Do you trust financial advisers? To whom do you turn when you want to discuss money? Do you consider yourself financially savvy? What sort of information do you find most valuable?

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Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

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36 Comments

Total Comments: 36
  1. 0
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    I didn’t lose faith I just didn’t want to lose the contents of my wallet. When he said he charged $350 per hour I figured I could do a lot of my own research for that sort of money and make my own decisions.
    I think they just got too greedy.

    • 0
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      I think a lot depends on whether you want continuing financial advice or just a one-off session.

      My own experience has been to discover that it takes far more financial acumen than the average person has, and a lot more time keeping track of the stock market than I have to spare (even if I understood the ins and outs ) and I know that I have done better with the advice of a trained professional than I would have done on my own – in fact I would have amost run out of money by now had I not taken advice.

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      There is no-one better to look after your finances then YOU.
      It’s not that hard, the critical part is self education, i.e Invest In Yourself. The average person lacks motivation not intelligence and finds themselves at the mercy of people with questionable ability.
      Deakin Uni runs a Financial Planning course and thew Internet is full of knowledge applicable to Financial Planning.

    • 0
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      I wouldn’t touch one with a 40Ft barge pole.

      I worked for Telford Property Trusts, running some of their investment properties. It became obvious that something was not right, & some of us were not surprised when directors went to prison for their illegal activities with the funds.

      My parents went to 3 over about 15 years. Each one cost them money.

      Were they dishonest? Probably, more interested in recommending the investments that paid the highest commission to the adviser. Were they incompetent? Most definitely, & probably a combination of both.

  2. 0
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    Having recently retired, I am perhaps lucky to have found our FP. Ours is a set and forget person, who looks after everything,stays in touch and just tells us that things are going OK. His fees are set, so no surprises and no percentages on whatever money you have invested.

  3. 0
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    Actually Mr Knowall, I have a lot of other things to do than study accountancy, the rules and regs of Centrelink, the taxation office and what is claimable and what is not. I don’t want to sit up all night keeping up with share on foreign stock markets etc.. . . . and I am happy to pay a modest sum of money to someone who is better qualified to do this for me.

    • 0
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      With your obvious limited knowledge of Financial Planning it’s probably better that you pay someone else that probably has as limited knowledge.
      This a perfect example of ignorance Not being Bliss.
      Fortunately technology has moved forward to the extent that there are now programs that will provide you with a comprehensive financial plan after you answer a multitude of questions.
      Financial Planner will be a thing of the past in the next few years, all except for people like you.

    • 0
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      Actually RK it sounds as though Maggie IS a financial planner beating the drum for their business.
      I have watched so many people get stung during the GFC, investing in futures on borrowed money etc. due to financial advice.
      The people who know how to look after their money have far better outcomes than letting someone who takes a cut no matter what.
      I didn’t want to have to worry about my portfolio when I retired but the pendulum government laws and private super fund fluctuating investments have made sure I have to constantly be aware of changes.

  4. 0
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    I am not sure if trust issues are the problem, I retired 7 years ago and found the advice I was given by the many financial advisors I contacted was so varied that it became very confusing, maybe I contacted too many, in the majority of cases there were two lots of fees, one for the the financial advice and the other was mostly in % of my balance, the problem I found with these systems was that everyone got paid no matter how well or how badly their advice proved go be, I am fully aware that there is a risk factor when investing, but the risk is all one way, after 5 years of modest returns and increasing fees I determined that I could look after my own money, I didn’t need to make as much because I wasn’t paying fees to two different sources, it may not be the solution for everyone but it works for me.

    • 0
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      Each to his own. I find it interesting that while we are generally prepared to pay for professional advice – say from doctors, dentists, solicitors, surveyors electricians builders and plumbers we quibble when it comes to financial advisors (though I would balk at paying two financial advisors, especially if they were giving me conflicting advice!)

      True, they cannot predict with total accuracy what markets will do but they do have more knowledge than lay people about minimising risk etc. and they do not make the sometimes hasty or emotional decisions we may make about our own money.

      I cannot agree with Knowall that EVERYONE is the best person to look after their own money even if they do go on courses.

    • 0
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      Just examine the results of the Commbank and Storm Financial advisers.

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      Maggie a financial adviser may have a degree in commerce (maybe).
      I have a degree too but could not command that hourly pay rate. Now I have retired every cent is precious and if you accept that $350 p.h. is OK then really its just an option for the the wealthy. However wealthy people are generally smart and they will manage their portfolios themselves!

    • 0
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      I agree Maggie, we do expect to pay doctors, plumbers etc, the difference is that if I employ a tradie to do I job for me and the result doesn’t do what it’s supposed to do then I don’t pay him, doctors are a little different, each of us have different needs from our medical people because our bodies react differently some times, money acts according to how the financial advisor gives advice I accept that financial advice is unpredictable in its accuracy, but never the less the advisor gets paid wether the advice is good or bad, maybe if the advisor didn’t get paid when your portfolio dropped in value and they got paid slightly more when your portfolio increased in value people might be more inclined to use them, it seems to me it’s all a bit of a gamble, but the problem is that it’s your money they are gambling with, with no loss to them either way win or lose they get paid out.

    • 0
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      When I was completing my Financial Planning course with Deakin Uni one of our tasks was to assess 3 organisations in our area. We had to approach the organisations as prospective clients and evaluate these organisations on 12 criteria. To my surprise the Planners that interviewed me were an ex painter an ex Fitter and an ex Electrician.
      Two of the 3 organisations were rated as below average and both recommended I take out a $200K loan and put into a share porfolio. This was 6 months before the GFC and I was 62 at the time….Great Advice huh.
      So to state that these guys are highly qualified is a joke.

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      My experience is not good of financial planners and chose to do my own financial planning. I do not know if a so called expert could get me a better return on my money or not. All I know is that I am doing OK I have no financial concerns and I am not greedy. Have enough to last me out.

      However, that said, I agree with Maggie that there are some people who have not a clue regarding finance and they would be better off getting financial assistance of some sort even if it does cost. I am sure there are some good advisors out there who do not charge like wounded bulls.

      How often do we hear in the media about people getting involved in some scheme or other and losing all their hard earned money through some con artist. Also many people are down right greedy and chase high returns and we all know high returns usually involve high risk.

  5. 0
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    Use an industry super fund for max performance and maybe able to use their fp if they are competent at that as well

  6. 0
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    The worst financial adviser we used was employed by the Commonwealth Bank that in the past we trusted.

  7. 0
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    Years ago I had a retired planner over to my house. I thought that I’d be safer with someone that had just retired and I’d pay directly. Nope. The week after (as I was thinking), I got a glossy brochure from a well known finance firm. No doubt he was going to get a fat commission. So, I flew up to Brisbane to an extremely well known advice firm. The Principal writes for newspapers. Same thing ! Brouchure the nexxt week. So, I do my own and make money every year with no extra charges. I’m in a Super fund and by active managing (after some practice) make more than leaving it. 10.4% last year. It’s a bit scary but I enjoy looking at it daily. I understand that it’s not for everyone.

  8. 0
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    My husband and I went to a financial planner (through our bank). What a disaster. He wanted me to cash in my superannuation, put it in the bank’s plan, at greater risk / costs, wasn’t interested in anything we needed help with that he couldn’t get his hands on. We paid the $500 fee (this was in 2002) and said goodbye. IF we had gone with his “plan” the fee would have been waived. We manage our own finances.

  9. 0
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    Like politicians, financial planners are in it for themselves.

  10. 0
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    Lost heaps. Lost confidence. Bank financial planner forged signature on docs and that not regarded as important when reviewed under Bank’s review program. Got 200+ dollars recompense from that when actual loss in excess of $60,000. Thank goodness had investment property to fall back on. But wait …… this year the Federal Government changed the asset test (with no grandfathering for those long retired). Now our holiday/retirement house has had to be sold. Not going anywhere near financial planner.

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