Should I not reveal all to my advisor so they don't over charge me?

Discussion in 'Financial Planning' started by Frank Manno, 13th Sep, 2017.

Join Australia's most dynamic and respected property investment community
  1. Frank Manno

    Frank Manno Well-Known Member

    Joined:
    26th Sep, 2016
    Posts:
    444
    Location:
    Sydney
    Due to previous experience, when advisors hear the amount I want to invest they seem to adjust their prices accordingly without good enough reason. I don't like it when an advisor wants to know how much I want to invest before they tell me their prices..

    All I want is from them is to recomend me a portfolio and then I'm on my own. So this will be a one off deal with them for the purpose of a balanced portfolio recommendation. But they can be expensive.. Fees from $1500 - $9000 'depending on the complexity of their work'

    Due to everyone's help in my other thread (talk you so much) , I now know exactly what I want and that is a Peter Thornhill passive investment in industrial shares, but I still want to see what an advisor would recommend.

    So I am going to see an advisor in a few days and want to invest around $1.25m - $1.4m but I don't want to tell them this but at the same time I don't want them to recommend the wrong shares either.

    Do you think they would recommend a different strategy based on the amount invested?

    Is it safe to simply tell them that I want to start off my investment with $125k and gradually add to it? Then once I have the portfolio thats recommended by them I can just add multipes to bring the investment up to $1.25m?

    The only info I want to give them is that I want a 5% return on my money. I don't need to tell them how much I need per year to retire or any of that. All I feel they need to know is the 4.5 - 5% dividend. (I already know 5% of $1.25m re invested will grow and give me the amount I actually need to retire)

    Do you think it will make any difference to their portfolio recommendation if they think I want to invest $125k rather than $1.25m?

    I'm not trying to avoid paying fair price for their service I'm just trying to avoid them purposely charging me too much. Like, $1500 is a fair price for someone to sit with me for an hour and then put together a portfolio for me. But not $9000 thats robbery.



    -Frank
     
  2. WattleIdo

    WattleIdo midas touch

    Joined:
    18th Jun, 2015
    Posts:
    3,429
    Location:
    Riverina NSW
    Yes, I think you shouldn't disclose the full amount.
    It's kind of like you know financial planners will sell product which is beneficial to them and will charge according to how much you have but still want to hear what they say, even though you already know what you want. Would you really pay even $1500 for that?
    There must be a better way?!
    There are people with mega bucks on the forum so I hope a few reply.
     
    Last edited: 13th Sep, 2017
  3. b0b555

    b0b555 Well-Known Member

    Joined:
    23rd Apr, 2017
    Posts:
    96
    Location:
    QLD
    Find an advisor who charges an hourly rate.
     
    Anne11 likes this.
  4. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

    Joined:
    18th Jun, 2015
    Posts:
    6,673
    Location:
    Perth WA + Buderim Qld
    To me, $1500 for a good and through plan and explanation is way too cheap. You pay peanuts you get monkeys - especially for good advice.

    If you are happy for someone to spend minimal time and effort on your financial future, go for the $1500 guy. Or just do it yourself. Otherwise, do some research into the more expensive guys, find out WHY they're expensive and make your choice.

    If it's advice only with zero product or assets under management, zero ongoing relationship I'd be charging at least $4-5000.

    I'd also disclose everything - if you don't trust them to do the right thing, they're not the right advisor (or you're not the right client.)
     
  5. lightbulbmoment

    lightbulbmoment Well-Known Member

    Joined:
    21st Jun, 2015
    Posts:
    959
    Location:
    nsw
    They would deal with clients playing with alot more than this all the time and i think your making it sound like a big deal its not to them.

    Shark tank last night from boost juice lady:

    "I only do business with upfront people who have nothing to hide, it will all come out in the end anyway"
     
    apk, Marg4000, Frank Manno and 2 others like this.
  6. Frank Manno

    Frank Manno Well-Known Member

    Joined:
    26th Sep, 2016
    Posts:
    444
    Location:
    Sydney
    Jess, ok thats good to know. At least I have a ballpark amount that is fair, I will happily pay that if it's the going rate for what I want.

    Like I said, I'm happy to pay whatever is fair I just want to ensure they don't use the amount invested to adjust their prices..


    -Frank
     
    Jess Peletier likes this.
  7. Anne11

    Anne11 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    571
    Location:
    Brisbane
    To get 'good' advice with regard to having a good financial plan costs around $4-5k one off, which i think is a fair price to pay. They will usually cover: what environment (inside or outside super) to invest in and by how much, to optimise your return, minimise tax and estate planning etc..

    It makes more sense to ask for a full plan, not
    just how to get 5% return.
     
    Frank Manno likes this.
  8. private_number

    private_number Well-Known Member

    Joined:
    22nd Jul, 2017
    Posts:
    152
    Location:
    Melbourne
    My mentor growing up gave me some solid advice which I will never forget; Tell them everything, but tell them nothing at all.

    With that being said (and as @lightbulbmoment mentioned in regards to Sharktank), there are circumstances where you SHOULD disclose everything and that's with your wife and your business partners (I learnt the hard way). In relation to shark tank, they are looking for business partners so you should tell them everything. In relation to advisers, well...

    The real question is, are you going to only ONE advisor for all your property needs? And once they do advise you on what you should do, do you just follow what they say or do you do your own extensive due diligence that questions every sentence he/she had spoken in that meeting?
     
    WattleIdo likes this.
  9. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,599
    Location:
    Gold Coast (Australia Wide)
    Hey doc

    It hurts

    Whe does it hurt the doc asks ?

    Dunno. Just hurts ..........

    Suggest you'd be best served to either diy. Or. Find an and visor you trust

    Previous bad experience is tough to get over, but by shielding the true resources you could be causing yours.ef more financial harm than savings a few k on fees.

    Ta

    Rolf
     
    wylie, kierank and Jess Peletier like this.
  10. Frank Manno

    Frank Manno Well-Known Member

    Joined:
    26th Sep, 2016
    Posts:
    444
    Location:
    Sydney
    Fair enough as I said above I am happy to pay that for good advice.. I just wasn't sure that this was the going rate when I started my post.

    See this is the thing, I've had advisors go through that before, they get too involved which was ok at the start but now I don't want all that.. just want to know which shares to buy and then go happily along my way knowing someone has put together a balanced portfolio for me. I don't want them to look into super or get involved in anything else..

    I wish I could just walk in and be like 'Tell me what stocks to buy and send me the bill' :)


    -Frank
     
  11. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    27,100
    Location:
    Sydney or NSW or Australia
    The options available for investing $125k vs $1.25m are poles apart. Access to retail funds or wholesale funds, fees for different investment options would vary as well.
     
    wylie, Anne11, kierank and 1 other person like this.
  12. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

    Joined:
    18th Jun, 2015
    Posts:
    6,673
    Location:
    Perth WA + Buderim Qld
    The problem with this is that it will need re-balancing and adjusting over time. What's balanced today will not look the same in 12 months, so you'll want to perhaps find someone who will do an annual review.
     
    Anne11 and kierank like this.
  13. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,672
    Location:
    Australia wide
    What about the insurance aspects - their advice is later found to be negligent, but you statement of advice only has $125,000 on it....
     
  14. Frank Manno

    Frank Manno Well-Known Member

    Joined:
    26th Sep, 2016
    Posts:
    444
    Location:
    Sydney
    I can't DIY I just don't trust myself.. I know enough to not make a bad decision and I know enough to know who is a good advisor and who isn't, but I don't know enough to make a good decision.

    Its like this, I know how to cook and I know what food I like but I can't tell exactly what the ingredients are to a a specific dish.. I know some of the ingredients but I don't know all of them and especially don't know the amounts of each. Hence why I need the chef to tell me whats in the dish :)


    -Frank
     
    Last edited: 13th Sep, 2017
  15. Swuzz

    Swuzz Well-Known Member

    Joined:
    30th Aug, 2017
    Posts:
    151
    Location:
    Melbourne
    ^ citation needed
     
  16. Frank Manno

    Frank Manno Well-Known Member

    Joined:
    26th Sep, 2016
    Posts:
    444
    Location:
    Sydney
    Very good point thank you I forgot about that..

    Yes I was going to pay a fee for someone (hopefully the same advisor) periodically to look at the portfolio and re balance. I think I better just tell them the truth.. at least also that way I won't walk away thinking 'what if he would have done it differently''..


    -Frank
     
  17. Ross Forrester

    Ross Forrester Well-Known Member

    Joined:
    30th Oct, 2016
    Posts:
    2,085
    Location:
    Perth, Western Australia
    The recommendations vary depending on the amount to invest. If you have more to invest you have a greater capacity for risk.

    I struggle in life if I start to lie to people. Tell them what you want to pay and be honest with your situation.
     
    Last edited: 13th Sep, 2017
    wylie, Anne11, Eric Wu and 2 others like this.
  18. Swuzz

    Swuzz Well-Known Member

    Joined:
    30th Aug, 2017
    Posts:
    151
    Location:
    Melbourne
    You should still know their fee scale before you see them ie whether that be flat rate or percentage.
     
    wylie and WattleIdo like this.
  19. Big Daddy

    Big Daddy Well-Known Member

    Joined:
    25th Jun, 2015
    Posts:
    998
    Location:
    Perth
    Get a fully independent advisor with no kickbacks
    IFAAA members – independent advisers

    According to the IFAAA, as at August 2017, there are 34 independent financial advisers in Australia who are also members of the IFAAA (satisfy the independence requirements under section 923A of the Corporations Act 2001, plus only charge hourly rates or retainers for services). The names of these independent advisers are:

    ACT
    Daniel Brammall Brocktons Independent Advisory
    Naomi Horobin Clover Financial
    Susannah Kulincevic Brocktons Independent Advisory
    Phil Thompson Rise Financial
    NSW
    Richard Barber Liquidity Independent Advisers
    Stuart Barber Liquidity Independent Advisers
    Phil Davies Liquidity Independent Advisers
    Fergus Hardingham FM Financial Solutions
    Michael Morrison M Financial Planning
    Howard Pitts Arc Financial Solutions
    Michael Radalj Your Private Advisers
    Bill Raffle Bennelong Private Wealth
    Ben Smythe Smythe Financial Management
    QLD
    Justin Brand Brand Financial
    Philip Layton Independent Wealth Management
    Todd Meynink Asset Science
    Neil Salkow Roskow Independent Advisory
    TAS
    Simon Duigan Core Independent Financial Advice
    SA
    Jacie Taylor Periapt Advisory
    VIC
    Dominic Alafaci Collins House Private Wealth
    Trent Alexander Financial Planning Expert
    Ashley Arandez Diverse Advisers
    Tom Barlow Roskow Independent Advisory
    Adriano Donato Roskow Independent Advisory
    Rick Horvat Horvat Financial Advisors
    Dennis Maddern Maddern Financial Advisers
    Jason McGregor Roskow Independent Advisory
    Matthew Ross Roskow Independent Advisory
    Amir Salehi Planning Wealth Independent Advisory
    Jason Smith Think Independent
    James Stephan Stephan Strategic
    Joe Stephan Stephan Strategic
    Graham Stewart Roskow Independent Advisory
    Chris Thoms Super Focus
     
    wylie, WattleIdo, Anne11 and 3 others like this.
  20. Frank Manno

    Frank Manno Well-Known Member

    Joined:
    26th Sep, 2016
    Posts:
    444
    Location:
    Sydney
    Thanks for that list.


    -Frank
     

Buy Property Interstate WITHOUT Dropping $15k On Buyers Agents Each Time! Helping People Achieve PASSIVE INCOME Using Our Unique Data-Driven System, So You Can Confidently Buy Top 5% Growth & Cashflow Property, Anywhere In Australia