Is it worth it to hire a financial planner?

I have some questions about financial planners...

Anyone ever used a financial planner?

What kind of advice did they give you?

What I don't want is a graduate or someone with no experience advising me on my financial decisions. How can you avoid them?

Are there any alternatives to financial planners?

Thanks

 

If you want advice on financial products only a 'financial planner' can advise - more specifically someone licensed to give financial advice.

Financial products include shares, insurance, margin loans, managed funds, efts, super, setting up SMSF etc.

Property is not a financial product so anyone advising on it wouldn't need a licence. Same with budgetting, planning involving property - but a credit licence might be needed if loans are talked about. Retirement advise per se isn't something that needs a licence, but practically speaking it does because you would need super to be considered.

Planners can also advise on all the general things that don't need a licence and they may be a good advisor for this as they have experience doing it all.

So what sort of advice do you need?

 

I have been overthinking investing and it is keeping me out of it all together. Need some sound financial advice be it property or shares, I am open to that.

 

I went to a financial planner specifically to talk about insurance and super (and the combination of the 2).
I ended up continuing with them mostly as a piece-of-mind backup for my wife who is incredibly risk averse. They were good to get advice regarding the insurance (no way did I want to wade through that quagmire), but I think my own plan for super would have performed the same if not better than theirs, without the management fees. They gave us some advice on investment strategy based off what we said we want to achieve, some of which we have implemented. My wife is still dubious about investment and needs lots of reassurance.

 

Find a good planner that also advises on property, and is tax licenced as well ideally, and pay for a 1 hour consultation and see how it goes - but make sure they charge by the hour rather than funds under management

 

do you mind sharing the financial planner details?

 

My personal view is financial planners in majority are not helpful and simple flog products.

The guys on this forum would have better financial knowledge (super, tax structures, property, shares, insurance) then 80% of financial planners.

There may be some truly awesome financial planner out there, but it be really hard to find / know who they are.

 

That is what has kept me away from them..

worse they may even recommend investments for which they get a kickback

 

This would be illegal.

 

Did they changed the law recently?

I do remember working on a project and assessed certain brokers where they were getting 0.45% on the investment product upfront, plus 0.25% trail. Then, if they convince the customer it would be tax efficient to borrow and invest, it be another 0.55% upfront on the loan and 0.25% trail.

This was back in 2007 pre-GFC though.

 

It must be more than 10 years since commissions were banned for everything except insurances

 

Wow, that's some skinny reasons to still be a financial planner.

 

Depends on the stage of your investment journey and complexity of your affairs/goals.

Doing a bit of prior research as to the various options avalaible to you would at least ensure you are asking a financial planner the right questions imo.

 

Really good personal financial product advisors are worth their weight in gold.

 

I think this is a little like the old 'shares vs property' q. The answer is it depends on whether you find something that aligns with your goals. The trickier q is 'how to find wothwhile advisors?' and that include ppl on this forum as well as outsiders.

I suspect you know who you want to listen to on the forum. Why did you pick them? You already know you don't want a kid fresh out of school. What do you want in an advisor?

 

Yep, I got one given to me for free when I was in my 20s by the bank when I took out my first home loan. Obviously, there was a conflict of interest as most of the products offered was the bank’s own however, the discussion was still very valuable and the person I had was genuine and didn’t push products that were not relevant. He spoke to me about insurance, investment options (shares) and super. At the time, the only thing relevant to me was insurance and so I ended up taking up an income protection policy (which I kept for 2 years and changed later with someone else).
I’m glad I was able to speak to a FP as you don’t know what you don’t know and I certainly didn’t know all the different insurances available and what would be relevant to my needs.

Since then, I have worked with insurance brokers to set up some of my other insurances (life, income protection, critical illness).

In terms of investments, I have l learnt a lot through my own research and through this forum and am comfortable with my decisions so I don’t feel like I need to see an FP at this stage, but I will definitely reach out to one again during the next stage of my life.

 

A knowledgeable FP can be invaluable for strategic advice. I’ve built up sizeable equity in Ip’s over the years and am in the process of implementing our end game. A good accountant is also essential to avoiding costly mistakes through lack of knowledge of tax rules and strategy. I think consulting professionals before making major investment decisions is crucial. From someone who has learnt the hard way….

 

Many people also mistakenly think FPs will help budgetting etc. In reality they sell and advise on financial regulated product. There are now specific spending focussed firms like MyBudget who operate in a niche to assist people to repair their financial position and assist them to discharge debt and establish good financial patterns. They usually do this by advancing a initial loan that consolidates all debt and then focus is on discharging this and saving. Ironically they were busted by ASIC for not having a license but as they assisted people with MONEY and loans they did need to be licensed. They are now licensed.

Many people also misunderstand property. Property can cost nothing from savings and can even cost a few dollars a week to keep. Or MUCH more. This is where property focusseed advisers can either be spruikers and sharks or really good at their job. Referrals will assist avoiding the sharks !! Dont think well known is safe. I have hear so many people tell me they weer saving to buy a first property when they held massive quity in their home and could already be on the road to investment. They just didnt ask the right people.

You want a good investment focussed mortgage broker, some tax support and if you have no idea about property perhaps a BA or a property adviser who isnt a shark. A broker for example may find present loans are costly in rate and are P&I but be freeing up to IO it could help you to save more cashflow. And advise you on what you could still borrow. And thats free !!! Best deal in the world really.

 

I'm in a similar position to the original poster and trying to work out who is best to engage as part of my 'wealth team'. I was originally thinking a property strategist but the lack of an AFS licence has me a little cautious. In your experience, are there many financial advisors who are also specialists in guiding/building investment property portfolios?