I am 56 years old and have 7 superannuation policies. I have known for years that I should combine them into one policy to reduce fees/charges but I don't know who to trust for the right advice? I am very concerned that if I go to a financial adviser the advice I receive will benefit that person more than me. To be blunt, I am concerned they will sell for the benefit of their back pocket rather than what's best for me. What can you advise?
Top answer provided by:
Peter Horsfield
Hi Jim,
While I appreciate the media has provided you a very solid foundation for your mistrust of advisors, I believe a better question you should ask is who do you trust? Do you trust your own judgement?
Over the 20 years I have been advising clients I believe there are three types of clients.
The first don’t trust anyone, these clients either try to do it all themselves (seeking free advice) or do nothing as they don’t even trust themselves. The value they receive from a relationship with a trusted advisor is of little benefit.
The second enjoy the advice process but often fail to implement the comprehensive advice. These clients have mediocre results as it’s the implementation of recommendations that moves one forward not simply the planning and piece meal implementation. The risk is that expectations are not attained by the client (due to lack of implementation by the client and advisor) and distrust has a foothold in undermine their relationship.
The third clients are delegators. They see the value of the advice and implement it. They have a trusted relationship with their advisor and are happy to pay for the advice, implementation and be held accountable by their trusted advisor. The clients experience profound value, achieve their goals sooner and a higher quality of life.
So Jim the better question is which of the above client descriptions best resonates with you?
As a trusted advisor I help my clients live their ideal life without financial worry. We do this specifically by helping client make smart choices about their money aligned to their values and then implement with them a step by step game plan doing so to ensure nothing falls through the cracks and providing the evidence that they can be more confident and certain.
I appreciate this may be a more comprehensive approach to advice than your initial question and to help you a little more try asking yourself “What’s important about money to you?” When asking my clients this question I find it helps clarify what they value most and why.
Thank you for the opportunity to assist you and I wish you the best on your quest to find your trusted advisor.
Warm regards
Peter Horsfield CFP
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Comments8
"I agree the key point is where your current concerns re paying someone are coming from. Any one running a business needs to make money, if you are expecting them to do it for nothing then I would be expecting the initial meeting to last no more than 15 minutes before they stop talking to you. I have personally dealt with people who believe I should be paying them for the pleasure of talking to them and I have dealt with others who value the advice they are provided with and the different perspective was linked to the client rather than me as the financial planner. Any planner should be able to state what they will charge you after an initial meeting and if they are not transparent and open then that is a fair indication that you shouldn't deal with them -- I wouldn't expect anything under $2,200 with this realistically being under the cost to the planner of providing the advice so the fee should be commencing at about $3,000 but you may get it cheaper for someone trying to build up their business. All planners (not your super funds or the bank call centre staff) need to operate under the best interest duty which gives you some protection but in reality if someone wants to rip you off then they will with this being the same in all industries. Find someone you trust from contacts you know who have used a financial planner but again if you can't accept that they will get paid then do itself and don't whinge if you get it wrong."
Scott 11:59 on 17 Feb 18
"It would be interesting to see how Corin Jacka earns his living. As a financial planner does he actually undertake what he advises the client to do? He also seems young and inexperienced. He should actually compare financial planner services to those of an accountant, solicitor or other rather than provide unbased statements on how financial advisors operate!"
cade 16:11 on 16 Feb 18
"Well Jim...you have 2 choices...DIY or pay a One-Off Advice Fee. If you pay for Advice, which technically means the Adviser is ticking all the Best Interest Safe Harbour Steps, then ASIC believe you will obtain recommendations that are in your Best Interest...the question is, will you be prepared to pay the $3,000 to $4,000 it will cost for the Adviser to comply with the new regulations???...I dare say not. BUT based on the fact that you still have 9 funds, this tells me that you want someone to make a decision for you...and this is called "Personal Advice". There is no way around it...either back yourself to make quality decisions or pay the fee so you have someone else to blame...you were blunt and so am I. Good Luck "
Matthew 16:06 on 16 Feb 18
"Like anything else, I'll encourage you to seek 2nd opinions all the time. Your initial consultations should be free, in some cases. So organising multiple catch ups to check the information you already have against the information provided, wouldn't be a bad idea. Secondly - you also need to remember that having multiple super funds and paying multiple fees alone shouldn't be the driver for seeking advice. Sure - it's no brainer that consolidating super funds will save you ongoing fees. The bigger question though is WHY ARE YOU SEEKING TO DO THIS? Get past the fees, admin savings, etc... get to the heart of the matter. Is it to start taking interest in your own money (about 10% of your funds go into super)? If yes, why? Why now? Why is it important to you? What are you prepared to do to achieve whatever reason there is to start this process? What's been the barriers to you doing this all along? Get to the heart of the matter. You'll quickly realise that financial advice goes beyond super consolidation. Sure! that's important but it's about looking at how you achieve your overall life goals - and perhaps superannuation is one of them. Hope that helps"
Andrew Akuoko 15:13 on 16 Feb 18
"Jim, think about the cost and hassle its causing to have 7 super funds to start with. Surely any advice you receive will not put you in any worse off a position. You can already see what the results are by not being well informed and not having an adviser to begin with - 7 different funds most likely with vastly different investment portfolios and insurances attached. If you are worried about how much the advisor is going to pocket out of this, try and think about how much time and effort the ideal outcome would cause you, add a suitable hourly rate for a professional to work on this and then I am sure you will see the fees you pay for the advice and its execution are well worth it. Good advice will generally come at a price. To ensure that the advice you receive is in your favour and unbiased make sure you spend quality time with your adviser so that he/she understands your concerns fully and delivers an outcome which is favourable. "
Sadat 15:02 on 16 Feb 18
"Just ask the adviser straight up front - how they get paid and how much. At least them you go in with your eyes open. If the adviser is comfortable with the way they are paid and the value of their service they should have no fear from firm questioning"
James T 15:39 on 17 Oct 16
"I agree with both Corin and Peter's points of view - something to be said for us clients taking a look at our own behaviour, but at the same time, we really need help to make sure we are not being taken for a ride!"
Florence 14:32 on 17 Oct 16
"Jim - interview two or three advisers, and make sure they're appropriately qualified and have a membership with either the FPA or SMSF Association - both require ongoing training. And if they try and sell you insurance in your first meeting, that's a red light right there!"
Jeff T 08:53 on 16 Oct 16