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  • Profile photo of elkamelkam
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    @elkam
    Join Date: 2006
    Post Count: 722

    Hello

    Can anyone tell me whether $3000 for a financial plan/advice is a reasonable fee.
     
    I have someone I went to about 18 months ago but am not happy with them for many reasons so I went to a large firm on my last visit to Melbourne ( I live OS). Their cost for a plan is $3000 which surprised me somewhat but maybe it's normal?

    Also, do all super funds allow you to choose whether to keep your money as direct shares, managed funds or cash. I am currently with Asgard and they do allow this. I have been trying to see if MLC (who also accept non residents) also have this facility but can't seem to find this information on their site. 
     
    Thank you for any advice.

    Elka

    Profile photo of Stuart WemyssStuart Wemyss
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    @stuart-wemyss
    Join Date: 2003
    Post Count: 598

    I think $3k is pretty cheap but of course depends on the quality of advice. You want an independent FP who does NOT take commissions. See http://www.independent-advice.com.au/index.asp

    Cheers

    Stu

    Profile photo of elkamelkam
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    @elkam
    Join Date: 2006
    Post Count: 722

    Hello Stuart

    Thank you for your reply and the link.

    As you say it depends on the quality of the advice. I certainly have no problem paying $3K for good advice and even don't care if the advisor gets commissions but I am not sure if I am going to get it.

    The person I went to doesn't appear on this site which is no surprise. He is part of a large stock brokering firm I use.

    Anyone willing to suggest someone in Melbourne ?

    Thanks
    Elka

    Profile photo of Stuart WemyssStuart Wemyss
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    @stuart-wemyss
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    Sure can. I have used Matt Ross personally and referred many clients to him. He is independent.

    Matthew Ross
    Authorised Representative
    Australian Independent Financial Advisers Pty Ltd, AFSL 286175
    Office:  Suite 2.15, 737 Burwood Road, Hawthorn VIC 3122
    Phone:  03 8862 6415
    Email: [email protected]

    Good luck.

    Profile photo of elkamelkam
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    @elkam
    Join Date: 2006
    Post Count: 722

    Thank you Stuart

    Profile photo of ducksterduckster
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    @duckster
    Join Date: 2004
    Post Count: 1,674

    Some financial advisers may get money / commission from a small percentage of what you invest over twenty plus years so the $3000 is upfront but are there any on going commission charges on top of this charge for the products you invest in ?
    I do not know if on going commissions work out dearer than $3000 up front .

    Profile photo of carlincarlin
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    @carlin
    Join Date: 2005
    Post Count: 211

    Has anyone ever used Industry Fund Financial Planning (IFFP), which offers commission free financial advice for industry super fund members?

    We, too, are wondering whether to fork out the $3000 we've been quoted.

    thanks,
    Carlin

    Profile photo of v8ghiav8ghia
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    @v8ghia
    Join Date: 2005
    Post Count: 871

    hey Elkam.  Yes..   No.

    Profile photo of Stuart WemyssStuart Wemyss
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    @stuart-wemyss
    Join Date: 2003
    Post Count: 598

    IFFP is a good start – i.e. totally fee for service.

    As I said, great financial advice is worth thousands so $3k is nothing compared to the value it could add if its good advice.

    Profile photo of elkamelkam
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    @elkam
    Join Date: 2006
    Post Count: 722
    v8ghia wrote:
    hey Elkam.  Yes..   No.

    Hello v8ghia

    Sorry but that post has gone over my head.
    Any more clues?

    Cheers
    Elka

    Profile photo of v8ghiav8ghia
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    @v8ghia
    Join Date: 2005
    Post Count: 871

    Hi Elka – you must be looking into it too deeply – it was just my personal opinion to your question –
    YES – I can tell you if it is a reasonable fee

    NO- It is'nt.

    I was keeping it brief. :-)

    All the best.

    Profile photo of katehasescapedkatehasescaped
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    @katehasescaped
    Join Date: 2005
    Post Count: 20

    Hi Elka,

    In answer to your question about super funds and whether 'all super funds allow you to choose whether to keep your money as direct shares, managed funds or cash' – they do not all give you that choice. Only a few allow direct shares and the quality and number of other different investment options can vary hugely between funds . Also, the fees can come in many different forms so you have to be aware of all fees (these are investment, admin, platform fees, as well as adviser commissions, etc). Also there are other factors to consider depending on what you want from your fund such as death nominations and insurance options to name a couple of factors, but really choosing the right fund for the right person is an individual thing.

    As for whether $3,000 is a fair price… it depends on what you are going to get for it. Did the planner you saw give you any idea of the value they will be adding and how they will help you meet your goals? I am a Planner myself (based in Perth) and we give our clients a good idea of the approximate tax savings/value we can add/number of hours work we will do when we explain what the cost will be. Our Financial Plans start at around $1,000 for restricted advice and average around $2-$4k but can go anywhere from there, depending on the amount of work involved (we charge fee for service based on the number of hours of work we are likely to put in). However, our clients are not going to agree to pay $5-$10k for a plan unless they can see the value before they sign up. Typically we will be saving them $1,000s in tax if we charge that much or will be doing complex and time consuming work. Maybe you need to get a better idea of what you will be getting for the $3k before you sign up and how the plan will address your goals.

    Not all planners are the same and vary hugely in their level of knowlege and number of products they can offer so it can be difficult to find a good one unless you get a referral. Also, it is usually best to find one that focuses on strategy rather than selling you products. Most Planners cannot say they are truly 'independent' as they mostly work from Approved Product Lists from their dealer groups. Therefore, it would be unlikely to find a planner who knows EVERY option on the market well enough to give sound advice on them. I would think you would want to find one that has a decent selection and isn't tied to one provider although sometimes products do not come into advice as it can be strategy based only.

    As for commission, sometimes that is rebated or taken into account when the plan is written.  We charge fee for service but a lot of planners charge %'s which are usually higher than fee for service, depending how much you are investing. However it is hard to avoid commission on some products as that is the way some are set up so while we prefer fee for service we do get commission from some products. This should all be fully disclosed in any Statement of Advice you get but it is probably wise to ask the Planner upfront to give you an idea of how they get paid and how much choice they have when recommending products (if applicable in your case).

    I hope this helps.

    Profile photo of elkamelkam
    Member
    @elkam
    Join Date: 2006
    Post Count: 722

    Hello Kate

    Thank you for taking the time to give me such a comprehensive answer. Much appreciated.

    No the advisor did not put any $ figures on any value adding he thought he could suggest but basically summarized what we had discussed at out meeting. To be fair however I had given him a "wish list" including a minimum net retirement income that I wanted to achieve.

    Basically the scope of the advice would include how to use super to get the best tax effective strategy that also meets my aims, recommend an asset allocation strategy both in and outside super including looking at my current assets, recommend specific investments again both in and out of super and do projections.  Also a review of my existing super fund outlining it's pros and cons.  This is just my laymans summary of a much longer letter outlining the scope of the advise I would receive.

    As you say it all depends on the competence of the advisor. As I said in my first post I did go to an advisor about 18 months ago. His sole recommendation was to keep contributing enough deductible super to wipe out my tax bill each year and gave me projections to show how this would improve my financial situation. He only charged me for time spent  and stated clearly what commissions he gets. However recently I spent half an hour on the phone with him persuading him that since I live OS and only have about 4 years left to be able to contribute to super (you do the maths  ) since I have no way of meeting the minimum employment requirement wasn't it a good idea to at least slowly transfer my share portfolio into super even as non deductible contributions. I am not aware of any disadvantage of keeping shares within a super fund (except the 0.4% commission at Asgard) seeing as these are not shares I trade. One immediate advantage should be that the tax credits wouldn't be wasted and that I won't need to pay income tax here on the dividends. Anyway this is just one of the things that gave me the idea that he had not spent enough time thinking about his advice which is the reason I went to a second advisor

    I guess I was just surprised at the difference in price originally.

    Again thank you for your post.
    Elka

    Profile photo of katehasescapedkatehasescaped
    Participant
    @katehasescaped
    Join Date: 2005
    Post Count: 20

    Hi Elka,

    No worries, I know it must be hard choosing the right adviser.

    If you are really keen on shares you could discuss a Self Managed Super Fund (SMSF) with your adviser (probably best to mention it before they write you a statement of advice). However, I am not sure of the implications of your living OS on this – I do not specialise in that particular area. Lots of our clients have SMSFs as they like to have the freedom to buy whichever shares they like – most platform super funds will have restrictions on which shares you can have in them such as ASX200 only, for example. You might want to run it past your adviser as they have all your details and should be able to tell you if a SMSF would work for you as there are heaps of factors to take into account and the compliance aspect. SMSF's are not for everyone but are great for some people, depending on their circumstances.

    Good luck with it all anyway!

    Profile photo of elkamelkam
    Member
    @elkam
    Join Date: 2006
    Post Count: 722

    Hello Kate

    You're right that a SMSF would suite me better and I have looked into it. Unfortunatley it's not possible because I'm OS and the trustee has to be a resident.

    Thank you for your advice.
    Cheers
    Elka

    Profile photo of Wealth AccumulatorWealth Accumulator
    Member
    @wealth-accumulator
    Join Date: 2008
    Post Count: 67

    What is good value?  The issue is often one doesn't see the results straight away, most sustainable wealth accumulation takes time and coughing up a big amount up front can be a  big ask.

    We have developed a different process for our clients who understand that they don't know what they don't know.

    Our service is like a gym membership – a joining fee then a minmum 12 month monthly membership fee.  During this time we work with our clients to help them on the way to a brighter financial future and hopefully a better lifestyle (that one is sometimes up to them).  Generally by the end of 12 months they see the benefit of having a wealth mentor.

    There is a flood of investment and wealth protection products / opportunities out there – how do you assess them and actually earn the income that feeds your wealth accumulation!

    I often hear so many saying we can do this ourselves – the issue is – often they can but they don't for whatever reason.

    Why do professional athletes have coaches/mentors?  Because from  time to time they need someone to motivate them to continue even when the chips are down.  There is a fair amount of psychology in the job, it is not just about investments.

    The first question to ask is what are you trying to achieve through the process – money is a means to an end – what is your end.

    Life is a series of destinations, whatever you do needs to be flexible to deal with life's changing situations as you travel from the cradle to the grave.

    I would be interested to know if you made a decision yet – if so – how and why.

    Best wishes for your future lifestyle.

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