It's one thing to charge dead people.
But what about the fact that 99℅ of people don't really need financial advice?
Just don't buy crap on a credit card. Pay highest interest debt first. Bang, that's all that most people need.
Financial advisers and tax agents just charge fees for telling people about tax dodges etc. Get rid of the tax code and all the special exceptions and deductions. Get rid of these con artists.
Sometimes free advice is the most expensive.
Melissa Caddick? Absolutely…
Barefoot Investor for $20
Facing financial Hardship? Call the National Debt Helpline on 1800 007 007
Bit too extreme measures on this one tbh, but yeah.
Partial foot investor for $30m…
I think this is sometimes true, but a user on here posted about using one to manage an elderly person's finances ahead of a move into aged care, and that is a good example where specialist help is likely worth it.
Any chance you might be able to point me to the thread? Currently going down this path for my Uncle. Thank you in advance.
Can't find it, sorry. I think it was just me bloviating about how financial advisors are a waste of time, so probably not too instructive!
Good luck with your uncle.
Maybe this post "Aged Care and Asset Protection 2019" https://www.ozbargain.com.au/node/434482
You might be able to get up to speed with all the complexities by reading up on it, but I agree with mskeggs. An outlay of perhaps $3K on a financial adviser could save a hundred times that on a move into aged care. Best wishes oO0Dam0Oo.
Happy to point out some things advisers can help with. Pm me if you want. Good luck with everything.
Lmao this level of stupidity is why the rich get richer and poor get poorer.
Yeah mate people are just lining up just to get ripped off.
But what about the fact that 99℅ of people don't really need financial advice?
That's a big call from someone who doesn't even understand basic things like liabilities.
Get rid of these con artists.
And this coming from someone who was asking here for advice on how to rort sick leave from his employer.
In today’s news.
OzB journalist Bob Bified, discredits uncovers a politician’s OzB’er doubtful past.
Financial advisers and tax agents just charge fees for telling people about tax dodges etc
I think you need a big bear hug
I saw what you did there
My financial advisor was put on notice this year. They charge a 0.99% fee on their "advice" no matter if I win, lose or draw. Recently made a loss with market downturns and whatever and they still took their 0.99% out. They lost money for me but still wanted their cut.
I told them, next year, if they don't make back my loss AND their fee and then some, or if they make another loss, they either dont charge me, or if they do, I'll pull all my money and accounts out of their service and do it myself.
They are absolute leeches. They are just a layer of bullshit that just rakes the cream from accounts and gets to play with other peoples money. To me, they are like car dealerships. Just a bullshit retailer in place between me and my car for no other reason than they just want a finger in a pie.
Recently made a loss with market downturns and whatever and they still took their 0.99% out. They lost money for me but still wanted their cut.
I'm not defending them, but "wins and losses" in the market are all relative. If the market is on a huge downturn, their advice could've meant that you lost a lot less than you could've otherwise.
To me, they are like car dealerships.
I disagree with this. They are worse.
Car dealers let you test drive their products for free.
The rest is 👍.
You are confusing a financial adviser with a person who can tell the future.
Do they normally earn their fee for you?
Passive Investing: The Evidence the Fund Management Industry Would Prefer You Not to See
https://youtu.be/zqa-jSuXmYw
Nothing is straight forward or black and white, for most people ETFs probably suit them fine but I am in both side of the camp, I picked stock as well as ETFs
ETFs for me is about regularly putting some money away to generate a future dividend stream for life, this never get sell as this is my forever passive income stream
it only grows from my saving and putting away capital gain from picking stocks
I pick stock for that massive pay day you don't get with ETFs, I applied a totally different strategy here
I don't hold many probably a dozen or two outside my ETFs holding but I select them with very strict criteria and I am very patient I just wait for the right time and pound and when the massive pay day arrived, I move on to the next and pick another stock but I bever hold more than 25 stocks.
It is not easy nor it that hard either, it just like anything else requires work and commitment and putting time toward it.
(Mainly research, regular reading and filtering business that meet my strict criteria then what left is to sit around until the right time to buy)
You shouldn't be paying a % fee. Go flat fee. % goes up with your balance when they don't do any more work.
The value is not in picking investments but setting up everything so you have achievable goals for retirement, death and life insurance.
Given how regulated their industry is now since FOFA reforms - they would have almost certainly discussed risk vs return, asked you about your goals and investment time horizon and given options available to you if you weren't in a position to absorb any risk..
Sounds like you just want someone to blame.
If the market was up you would probably be saying how smart an investor you are, and not given the advisor any kudos. I'm sure that in the 12 months preceding march 2022 your portfolio gained much more than 0.99%. Did you share in that windfall with your advisor by paying more than 0.99%?
You yourself would have signed off on your asset allocation and investment strategy. The advisor can make recommendations, but doesn't just get to just do whatever trades and investment strategy they want with your money
lol they aren't free, i'm with them on this one
Personally I’d pay them an hourly rate. Get their advice and manage the rest. The vast majority of funds and investments are loosing money during this downturn.
No one can time the market reliably.
You would have signed their fee for service letter for at least 12 months. they have duties i.e regulatory reporting. they would have told you that risk profiles help determine your tolerance for losses. Seems like yours is little…
But what about the fact that 99℅ of people don't really need financial advice?
Exactly. Just stop by r/ASX_BETS they know how to make a fortune… Or lose a fortune… Or best of all, make a fortune then lose it!
But at least you didn't waste money getting tailored financial advice
I engaged a financial planner about 5 years before I retired, it cost about $3k and it was well worth it, teaching me about money/super/pension/investment. It really put my mind at rest about my financial situation.
I ditched the financial planner two years later when I realised that the super scheme he had put me into was paying him a regular commission for doing nothing. Trailing commissions are banned now, and I actually received a substantial refund from the super scheme.
I still think the $3k was a good investment, but I agree with you - the guy was a ripoff merchant.
The industry is better regulated now, with a pay-for-advice model. I would maintain that there are times in many people's lives when a financial planner can be very helpful.
Did you read fin books like barefoot before
Commissions were banned in 2013 this they would not have been receiving commissions from a super fund they put you in 5 years ago.
I retired in 2016, got the advice (and the trailing commissions) about 2011.
I was a very cautious investor before that, had all my super in cash. The education I got from the adviser was well worth the cost, now my super funds (converted into pension) are in growth and property, generating over $25k per annum in returns.
The adviser also showed me how to project spending, income, and pension into the future using Excel. I now feel that I'm in charge of my finances, rather than being constantly worried about spending and whether I had enough.
No, I hadn't read the Barefoot Investor before, Scott Pape didn't write it till 2016. I've read it since, I would highly recommend it.
I would still suggest using a financial adviser at critical stages in your life, e.g. if you come into a lot of money, or if you are just before retirement (hopefully with a pile of assets) when you need to know when you can afford to retire and what standard of living you can expect. Or if you are close to bankruptcy (but there are free services offering debt advice).
You’re lucky. I had the misfortune to see a Financial Planner around 20 years ago, before the regulations changed. Withdrew ~$500k in equity in the house to invest and within a few short years lost almost all of it.
Turns out his primary criteria for choosing “investments” was which ones paid the highest commissions.
I will never trust a financial advisor again.
You need some financial knowledge before seeing a investor.
Basic stuff like it's hard to beat the market on returns.
And how ETFs. Can reduce lots of risk.
And the four percent draw rule for retirement.
Helps also if you have an idea of how much you need before and are fine with conservative
Where do I find a financial advisor advisor?
I hear you, seen it happen to a family member
Somehow this comment led me down a path to a subreddit on melts.
Do tell. Something must have triggered this rant.
OP can’t, they got themselves penalty boxed.
I invest all my money into Uber Eats. It's expanded my belly portfolio significantly.
let hope your investment doesn't go belly up anytime soon
could also invest in cardiac shares … ?
"Once again, the conservative sandwich heavy portfolio pays off for the hungry investor"
I would counter that by saying most people will only lead a mediocre life if they follow only those two things
This OP is random indeed.
But what about the fact that 99℅ of people don't really need financial advice?
Then I have no idea how only 67% of people own (include those with mortgage) their own home
Read up on Dunning–Kruger effect
Financial advisers and tax agents just charge fees for telling people about tax dodges etc.
That is why rich people use them because the savings they make outweigh the cost. You actually need to know how much capital you have and how much you stand to lose / gain.
Not that I use a financial planner or a tax agent simply because I don't have complex enough financials or have that much to be a target for the ATO.
I was thinking exactly about the Dining-Kruger effect… In this case if 99% were financially savvy and wouldn't benefit from objective effective advice there would be very little bad debt and we'd have very few on social supports etc…. When in fact we have very high levels of bad debt, a much higher rate of financial stress than 1% and a large proportion of people with high yield car loans, credit card debt and ineffective wealth management.
I think OP probably needs to consider their is junk financial advice and advisers that leech off society (like most professions) and there is highly effective and extremely valuable financial advice that can build wealth.
I have used a wealth management specialist for very specific advice regarding specific detailed issues I needed advice on and that had been extremely valuable.
I was thinking exactly about the Dining-Kruger effect
Unless you are eating your way to financial success, it's called the Dunning-Kruger effect. :-)
I would say that unless you have a multi-million dollar portfolio, seeking a financial planner is almost unnecessary for the vast majority. Most of the financial information required can be obtained online or from books borrowed from your local library. And be careful of finfluencers touting their products/courses - the vast majority are leeches.
Learning to take personal responsibility for your own financial future is the best investment you can possibly make.
Yes agree that most information is available to assist with informed decision make. Yes agree that proper financial planning advice probably doesn't yield significant meaningful benefit until dealing with a multi million dollar portfolio…
And yes dining is yum. But my point was that if good financial/investment information was both truly accessible and then implemented… We wouldn't have such high levels of bad debt, so many people with limited safety nets etc.
Please make a poll
Why single out one profession? The advantage of living in a free country is our right to CHOOSE! Seems like an attack on one profession that is likely relevant to many others. Nobody twists your arm to go to any professional…they all charge fees…. to stay in business. All professionals don't fit in any one mould…
They charge way more than they should. But, as someone who would like to be a financial planner, I can tell you it's not possible for them to give "quick" advice. They have to understand your needs and do a full plan, statement of advice. That is the fault of government legislation.
It would be great to be able to get limited advice, but govt won't allow it.
So they charge a lot.
As for people not needing it, I believe most people are pretty uneducated in finance.
A planner can make a huge difference if their advice is followed long term.
So many retire poor and on the pension. It need no be so.
If you feel you don't need help, you're lucky to be in that position.
But don't overestimate the knowledge of others.
It seems like many ppl here just really do not like financial advisers. Really dont like them.
Yes and no.
The vast majority of licensed Financial Planners are bland and boring. Nothing of substance other than more Super, another house and some shares.
Now, real astute and savvy Financial Planners know best.
I still recall how Malcolm Turnbull (many years ago) made millions by investing and speculating in the stock exchange of Russia (Russia!!!!!!).
Try finding a Financial Planner like that and you'll get rich. Good luck finding one.
just watch jim rogers his been saying russia for 10 years lol
Knowing where and when to put your money into Russia suggests are beloved previous pm was in contact with somebody perhaps a little more "knowledgeable" than a financial planner.
Re tax code, yep make an entire industry around navigating complex codes "efficiently". Perhaps one can save on costs. But surely there's a simpler system than one that employs one or more entire industries worth of people in order to ensure tax obligations are met or dodged with finesse.
a little more "knowledgeable" than a financial planner.
Well that is the sort of financial planner I'll seek for financial planning!!! :-]
The rest are just charlatans with a license to fast-talk.
I've read outflows out of equities are highest near market bottoms and inflows are highest around market tops. It would be interesting to know how many of these people initiating these flows are advised VS non advised.
It could be that all of these ppl are the 1% op says need advice? But my guess is the majority are non advised making decisions detrimental to their future. Having an objective 3rd party person to talk to can help ppl make better decisions eg ozbargain forum, taxi driver, drunk at the pub, or shock horror a financial adviser.
Sometimes true, Often completely false. Unfortunately, the tax laws are horribly complex because they need to be, people will spend inordinate amounts of time and money to get around the tax laws and hence the laws are to address those people. Sadly that means many others need tax agents/advisors to ensure they aren't being unfairly screwed by the ATO.
Similarly, a good financial Advisor is worth their weight in gold, sadly they are few and far between.
I got some of my most profitable tax advise from a tax advisor. I only got that advise by phrasing a question as "If it was you, what would you do", his answer was "I would never give you this advise, but if it was me I would do blah", saved me 10's of thousands in tax.
How to get rich.
Take all your money out the bank, sell all your shares, use the money to buy houses.
Take out as large a loan as possible. Buy more houses.
Rent them out then sell them later for a huge capital gain.
So simple. No need to pay advisors. Property is wealth is Australia.
Hodl real estate works.
I'm a financial planner and if you are savvy and have time, you absolutely shouldn't need one.
But lets say you are time poor and don't know certain benefits or tax savings or you just CBF doing the research then that's when advisers can assist in return for money of course.
To be honest most of these finance jobs are can automated through a series of questionnaires to find what service or products people need.
Charges are ridiculous but so are a lot of other professions. I wouldn't consider it a con because people aren't force to seek paid financial advice.
The general public is pretty much lazy. It's like my parents asking me how to reset their Google password which a simple Google search could do.
It's the same with mechanics like I could change the wipers but I'm too lazy to do it
This is true.
It gets worse if you are children of immigrant parents that CBF or not motivated to learn English / other people's culture.
Tasks are almost like slavery lol.
Financial Planners - Biggest Rip off Merchants Ever?
yes they are rip offs, are they the biggest Rip offs ever? im not sure i'd probably throw Real Estate Agents in that category
Yup biggest rip offs and i got conned by one. Frankly the problem is I and a lot of people thing they are actually a properly regulated industry and i actually thought of them like a tax accountant or a profession where you pay them for a service and that service is to provide you with the best professional unbiased advice based on their education / experience etc. I had no clue they were actually more a salesman and it was perfectly legal for them to promote their own products and only advice you on the products they have a financial gain in….
Well
Surely if they make you money then you can afford to pay them?
yes there are some duds, and there's AMP
But if you find a good one they pretty much pay for themselves.
But if you find a good one they pretty much pay for themselves.
This is true but facts are 91% of fund managers or active advice given fail to beat the market, id argue Bob with his 8 month financial Planning certificate will probably not be in the 9% as i'd say a large % of that 9% is people 'insider trading' and if you can 'afford' an adviser who is at that level you arent wasting time on Ozbargin
Financial advice is only 'good' in hindsight fact is no one can predict the market if they could they wouldn't be 'giving' advice they would be living it up on a yacht with girls that look like Dua Lipa walking around in barely anything, drinking Whisky more expensive then my car…
Best advice for most people is once your own you owner occupied property invest in Board based low fee EFTs ie VAS, VGS, QOL, SPY etc
This is true but facts are 91% of fund managers or active advice given fail to beat the market
the question is where to find these remaining 9%, and whether they consistently beat the market over long period after fees.
yes that is what beating the market means it includes cost of 'donig business' but it is essentially 1 in 10 beat the market and as i said these people beating the market often arent selling services to your average investor they are dealing with people with north of 5-10m to invest in
FP is not for everyone. In my years in the industry, I've generally found:
FPs being best utilised where clients are 'rich' (HNW/UHNW types). These clients are usually equipped with >$250k income, strong capital and time poor - usually partners of law firms, medical specialists, successful business owners. FPs with these clients tend to provide very sophisticated advice (mainly around tax structuring) and also offer unique investment opportunities (think unlisted). These FPs are also very specialised, usually have an IB bankground and/or fund management experience
The other FPs are usually dealing with the average joe family. These clients have salary jobs earning around the median, not much sophistication to their situation (e.g., a house with a mortgage, a personal share portfolio). FP's with these clients are essentially salespeople. They don't sell products like they used to instead, they sell an idea - peace of mind. Is that wrong or a 'rip off'? That's subjective. To some, a peace of mind that their financial situation is being taken care of is a huge non-tangible benefit, to others it's a rip off.
The FPs in 2 are burdened with so much compliance so their fees are going up. What used to cost $1.5k pa for advice, is now north of $3k. The paperwork, filing etc chunk up hours of an FP business.
I personally feel the industry is still in its infancy. Perhaps with more years and streamlined regulation we can expect costs to come down. However, I still don't think FPs have the 'hard skills' to offer
TLDR - to some, no. To others yes. Value is subjective.
Spot on with the regulation increasing the cost of advice.
Agree with your comments above. PI insurance and compliance pushed cost of advice up. Definitely not for everybody, but a good FP can save you time and money if done correctly especially when you're close to retirement, or pension age with the various rules and regulation, inheritance etc. Some insurances are only available to FP due to it being personal advice. All in all, you can learn anything online but doesn't mean you should do it yourself because knowing a little bit can be more harmful. You can learn to play sport or exercise online but people still pay for a coach. The Tax book can be bought online but you're still not licensed etc etc.
Value is 100% subjective, and some people also value their time so are willing to pay someone to look after it.
Years ago my ex and I saw one when we were heavily debt and they went through our bank accounts and receipts and reorganized our pay into a nice budget that helped us get everything back on track.
Didn't cost us much as it was subsidized by Centrelink and it got us out of debt and I've not been in debt ever since.
It may not be useful for other people but it certainly was for us! I
I think the OP's definition of a financial planner is not a debt consolidator/advisor.
Financial advisors are primarily for investment portfolios, what you had was more a debt removal service.
incorrect planners do debt consolidation advice too
in fact there is a lot of planners work with Centrelink too
Yes. Centrelink work is priceless. Ppl will pay money bc they do not want to deal with Centrelink.
@mrtin: My mum decided to stop getting the pension because of the pain of dealing with Centrelink. Must be part of their strategy.
@Janko: Sad isn't it?
It's the system. But if you know the rules, and be on the front foot, then you can get by.
My clients rarely make contact with Centrelink. Lucky them.
@mrtin: guess it depends which service you are after. I never get through that quickly nor do my family…
Have always wondered what the collective noun is for a gathering of financial advisors?
A scam of financial planners?
perhaps "a school"
Like accountants, need to be lucky to find someone of quality - as the good ones have no room for more clients.
Better to learn yourself IMO and keep your finger on the pulse.
When did Ozb become a personal rant platform? My ears hurt
eyes
Common sense isn't as common as you think.
Mind you we need people bad with money to balance out the people who are good with money.
Like every profession there are good and bad in it, although its been cleaned up a lot recently. There are some very, very good financial advisers indeed. The sort that will make sure you have the right insurance in place to look after your family if anything happens to you, will teach you how to invest effectively and manage risk, will take care of complex financial issues for you so you don't have to etc. For lower wealth clients, how to maximise things like Centrelink entitlements and accumulate and use your super most effectively are key.
As for biggest rip off merchants ever, you seem to be forgetting real estate agents, used car salesmen, religions not paying taxes, politicians, petrol companies, energy companies and many, many more.
99℅
99 "care of"
What does that even mean?
I feel like FPs are slightly transparent about what they are about to do to you.
Real Estate agents though. F me, they have been on another level in my experience.
They were good to start helped me pay off house in 4 years but that was stockmarket boom years where anybody could have made money. After that the did nothing all of the trades and the money made was due to my share purchases which they provided research I asked for but no recommendations.
What made me leave was when they wanted to redo my financial plan and encompass
managing my super with like a 4K fee a year up from 1.5K (and then they were hacked and lost a portion of taxfile numbers and I was called by an ATO with somebody trying to setup a ABN using my details). Australian Super is a fraction of that and has a functional website and I can buy and sell
shares there too without this type of cost and they are "more" secure. To their credit they were transparent but I thought managing it myself ie just buying real estate was the easiest way to go.
Free advice is the most expensive advice. There's a reason people hire experts in any field/industry and you usually get what you pay for. Maybe OP wanted to pay a pittance and expected a miracle worker?
Top 5 places for poor financial advice:
Rip off? Absolutely.