Financial advisors RANT!

I am seriously annoyed my wife and I have been trying to sort out our personal insurances for quite sometime now, we have used 2 seperate highly recommended financial advisors one of them being 100% independent and to be honest they have both been ****!

We need our personal insurances life/tpd/trauma/IP set up in the most tax effective manner. We are lead to believe that you need to go though an advisor to be able to access the best own occupation policies and premiums, we are not interested in paying commissions either we want to pay a fee for service to set everything up and lastly we wanted a professional 2nd opinion about our current asset allocation for our super accounts.

We have now used 2 seperate FA with the exact same outcome, we made it clear as day what we wanted in the initial consult, they took us on as a client we paid up front because that is apparently what is required and we were told it will take 6 weeks to sort out, many months later and continual delays we finally get to the point where the SOA is almost ready to be delivered and the advisor is trying to put us in all sorts of wrap platforms, change our super accounts to them ect ect red flags everywhere when we made it clear we are not going to do that we just need what we asked for they both went cold and uncontactable even tho we have already paid them!

It’s clear to me if they cannot get an ongoing trailing commissions or a percentage of your net worth you are not worth their time when obviously other clients are happy to do so.

As it stands I have wasted my time, my money and god forbid something bad happens we are still currently not adequately insured. Any suggestions on what we can do moving forward?

 

Tell them you will file a complaint with an ombudsmen

You could have just read money magazine in terms of tip products.

Most FAs are pretty useless. A lot of the have zero net wealth.

 

Independents are not supposed to be getting commissions on insurance or if they do rebate it and commissions on other things were banned about 25 years ago

 

yes correct but that doesn’t stop independents pushing you into other products which will one way or the other benefits them selves, at the end of the day they are running a business to make money which only makes sense.

 

I don't understand these wrap platform things really. How would it benefit themselves?

 

They set up their systems around them, using model portfolios; as the clients have very similar portfolios if a change is needed it's just a matter of making any change once and copying it across all their clients.

It is much easier administratively, once the client is in the platform there's no need for new application forms or ID requirements - time is money.

[edit - and the client pays for the platform, so the admin cost is borne by the client and not the FA].

 

Could you not go to an insurance broker for this advice? (It's been a while since I've used one, so the environment could be vastly different).

 

Ah that makes sense!

 

Most now charge a certain % of the portfolio.....some as high as 0.5-1%...imagine you have $10m portfolio......that is 50-100k per year....

Forget...most I met are absolutely useless...same with brokers....

 

I had a retail fund paying fees for advisor and never got any advice, Went to a Netwealth wrap account as I was told I could invest in U.S shares. It had to be done through a FA after setting up they said it was too hard to invest in U.S and expensive.. All they advised and done was to put it in STW ! and charged fees for every thing, Contribution fees like 2.5% and up to 5%, I think it depended on amount, management fees of about 1%, and a high exit fee when I bailed out with fees taking all gains. Complained to ASIC but they are useless and another waste of funds. At least I found out how to make money which was to be invested in the company and be an owner rather than invest in the product and be a client, bought shares when the company listed for $5.00. 4x that in 7 years and have growng dividend of 5% YOC.

 

I am under the impression you need an independent financial advisor who is happy with fee for service arrangement and not commissions, but I could be wrong does anyone have any recommendations? thanks!

 

I don’t think they could be independent if receiving a commission. The word independent is regulated by the corporations act

 

There are planners out there that do get a commission but give it 100% back to the client and charge a flat fee.

 

So they actively cancelled the auto life insurance in super? It is auto by default isnt it or has that changed?

 

are you licensed to give financial advice Rolf?