Financial Planners....confusion

Do financial planners sell a product or a service? or both

So if you know FP's are selling a product why would you use/pay for this service ? Not necessarily going to be the best option for your circumstances.

If you are seeking FP service - would it make sense to seek advice from your accountant. Assuming they are savvy when it comes to strategizing/structures?.....

So.... next question... why use a financial planner at all??? can someone convince me this makes sense.

 

When you know nothing, anything sounds good?

 

This is always a good start,no one is innocent..
Searching: ASIC & MoneySmart

 

Like brokers, there are good ones and not so good ones.

Why you would use an FP would be decided by the complexity of your affairs.

Some will just flog a product and others will add massive value, same as a broker.

 

Planners can sell products such as insurance or SMSF set ups. A financial services licence is needed for this and accountants couldn't help unless they have this licence too.

Services may be helping with budgeting etc and no licence is required for this.

Structuring is legal advice yet many planners illegally give this advice. Only lawyers can giver structuring advice.

 

Accountants can't give financial advice, what they do is different to what a FP is supposed to provide.

If you're simply going to a FP because they've got a product to sell, why bother when you can purchase that product directly? You go to financial planners and mortgage brokers for the advice and services they offer. The product itself is one that matches the outcomes of that advice.

 

I give lots of advice where there's no product involved - e.g. do you need to put more in super to reach your retirement objective?

There is also a time and place for a product recommendation - there's a massive number of investment options out there which can be very bewildering to people and they may need guidance.

By charging a fee for service I don't rely on product sales which gives me the freedom to tailor my advice and have a collaborative approach with my clients.

 

We want to know where to go to ask the question: "How do we get to where we want to go?"

I already know that most professionals will not be able to answer this because it is a little bit of column A and a bit of column B and some more from column C. Maybe I'll ask in PC and let you guys nut it out with us.

 

That's a very open ended question. So where do you want to go, and where are you currently?

 

sounds like we need a matrix re who provides what, and when and where.

 

I tried to put one together here:
Who can advise on what? Who can advise on what?

 

also need the "when" i.e at which point of time to speak to who.

 

It's often been said that investing is a team sport

 

exactly.

 

with etf and stuff now days not sure why u still need financial advisor.. if u need help with budget get an app. if you need help with goals on how to get a to xx amount of money with xx amount of time .. get an apps
need knowledge.. buy a book.. use the internet, forums etc.

 

It's true that there is a lot of information readily available these days and a lot of people are self guided, however there are still many people who want tailored advice that applies to their particular set of circumstances. This goes beyond gathering information.

For example, many people I speak to are seeking a strategy to give them clarity that they will be able to do what they want to in retirement (for the rest of their life). Sometimes this conversation includes a reality check when there is the realisation that the person's current path won't get them to where they want to be.

What about the big picture? Making sure your strategy is correct, tax efficiency is maximised, your estate planning is in order and your risk insurances are adequate are just some of the areas of advice I handle. How many apps will you need and how much time do you have to do this yourself? And what's your experience like at handling the complexity?

Many people will realise that they need to seek expert advice or miss out on opportunities and strategies that they hadn't even considered. It's often when things go wrong that people recognise that they haven't structured things correctly and it may be too late to go back and fix it.

 

Perhaps people think FP have a magic bullet when it comes to choice of investment??

 

Despite all this knowledge only a click away, it's amazing how many people are completely clueless or misinformed about such 'simple' things like finance, investing, tax...

 

this is kind of self diagnosing.

if it does not go bad, it is probably ok. but if you mis-diagnose, well...

and missing out on the best strategy, the opportunity costs may not look pretty either.

 

As a generalisation to make a point

Would you trust or rely on some young kid who has just graduated from uni with a piece of paper no assets themselves, no track record, no experience to deal with your financial affairs?

I think it's ludicrous

Just like my industry where I deal with personal trainers who know the name of every muscle but have virtually never been inside a gym or don't know what a straight legged dead lift is