AFR: ASIC report damms financial planners

Page three of today's AFR...

One line says '...in 2003, when less than half the advice was found to have a reasonable basis...'.

Also about the recent report (2006), '1 in 3 people was advised to switch super funds for no credible reason'... and... 'Close to 1 in 5 people received advice while failed or probably failed to meet the law'.

I have always wanted to consult a planner/advisor, but now it seems I have at least a 1 in 3 chance to get bad advice. I'm not sure that just checking whether the planner is successful is enough because maybe they are successful at taking our money and that's why they're wealthy.

I'd still like to meet with a good advisor though to have a one on one. These forums are great, but it would be good to go over everything with a fine-toothed comb.

T,

I'd like to find these wealthy planners, if you know of any, let me know. Other than the ones I work with, that is...

I love this industry, but I agree wholeheartedly that it is full of shonks and amateurs who care only about the money they can make for themselves.

However, if people aren't willing to do the hard yards to find someone they can rely on who will get them where they want to go, well...

As I've said so many times before, people deserve the advice they get.

Mark

A good Financial Planner, who not only knows their stuff but also enjoys what they do, I would think is in a potentially wonderful position. I'm not talking about commissions either!

Why?

Have a look around your family, friends or even a bit further a field and imagine how many of those people could change their lives, their spouse's life, their children's lives, their parent's lives dramatically with some good financial planning and restructuring?

For many the benefits could be huge and yet people still sit there with a million dollars of assets on the pension and wonder how they are possibly going to pay for the car registration next time.

I would think the vast majority of people I know could be in a much better financial position with a better financial education and possibly some good financial advice.

In other words, while there may well be plenty of shonks out there, a good Financial Planner literally has the potential to change people's lives and surely that would have to be rewarding.

As an aside, I remember a number of years ago going to a meeting at Chatswood with Steve Navra. I must have prepared about 3 pages of detailed questions before I went. After talking to him in general for about 15 minutes I glanced at the questions and realised he'd either answered ALL of them in that period or made the rest redundant! I prepared twice as many questions 6 months later and the bugger did the same thing to me again in about 10 minutes this time.

A good financial planner is part planner, part accountant, part teacher, part councellor and probably a number of other 'parts' too.

They have the potential to be a wonderful asset and to be in a very rewarding occupation. Sure there are plenty of shonks out there so just make sure you continue your own education to know when you are being well advised as opposed to being led astray.

I think the trouble is that some people expect a financial planner to magically make them rich or take responsibility for their financial affairs when they refuse to do so themselves...

Yep.....

I guess one frustration for certain FP's would also be that you can only work with the Client Risk Profile you are presented with at the time. Possibly a number of better financial options could be presented, but if the individual isn't ready for those then it would be very wrong to try and impose them at the time.

I guess it always comes back to the individual. If you at least keep on trying to learn then it's amazing how many other options appear.

Not quite. FP's are not accountants. Your accountant could be an FP and your FP might have accountancy qualifications, but you shouldn't mix financial planning with accounting, in my opinion.

I keep mine separate, one is for helping me with my investment decisions, the other is to counsel me on tax issues. Two different fields.

Mark

I actually agree more with Alan. I think a good planner "must" know the accounting/tax implications of an investment as it will impact on the applicable investments available to someone such as myself. I'm not saying that they have to be a CPA qualfiied accountant, just that they need to know the tax consequences of an investment.

No worries Mark.

I wasn't trying to imply that FP's should be providing full accounting advice.

Alan,

No worries mate! I understand where you're coming from, and agree that FP's should at least have some understanding of tax laws (of course!), but as I'm sure you would agree do not replace accountants!

Mark