Hi everyone,
I'm writing another piece at the moment and I'm looking for the bad, the ugly and the terrible side of your experiences with Financial Planners (and anyone else in the financial services industry for that matter) – from first impressions to things that have gone terribly wrong.
I have theories from about bias and conflicts of interest that ends with advice that is not right for the individual to lack of proper financial education by some of the planners themselves – and much more.
Any good stories are also welcomed of course
Thanking you for your input, and I hope you don't mind me picking everyone's mind for ideas and inspiration!
Vent away!
From my experience dealing with property investors the feedback I get is Financial Planners generally seem focused mainly on super, shares and managed funds (correct me if I am wrong) and haven’t been renown for giving good advice on property. Maybe due to where you derive your income from I guess. In my opinion property is one of the best investment avenues available. I like the leveraging that borrowed money on property can give me if its all about a return on the size of an asset. .. (getting sidetracked here).. I would like to see more Financial Planners getting involved in property.
FP’s are all about diversification & minimisation of risk across a portfolio. This required good skills in asset allocation & portfolio analysis as well as developing an understanding of the client’s risk profile.
To achieve the right balance, most FP’S avoid direct property favouring indirect property eg property trusts, syndicates or property-rich companies. Portfolio theory will vindicate the FP’S, as overexposure to property has been achieved by the ppor.
If I use the services of an FP it’ll be for balancing the non-direct property components of a portfolio.
I’ve looked at it seriously twice (2 years ago and 7 years ago). These were specialist financial planners. Both times recommended by people I know well. Both times I walked away after my own due diligence. Looking back, had I taken their advice it would have been financially disastrous.
Two observations.
(1) They sell pre-packaged investment products irrespective of whether the products are right for you. They don’t have to do much original thinking. I wanted to include buying my own office as part of the portfolio, along with shares etc, but it was clear both times the financial planners had no idea of how to go about it.
(2) They can’t help themselves from loading up their recommendations with all sorts of insurance cover. So much is recommended to go towards ‘asset security’ there is little room for capital allocated to actually generating asset growth. That’s the biggest telltale sign for me.I was a Director at a big 4 accounting firm for five years, I’ve done the securities institute course and I have been an examiner for CPA exams, so I’m not naive on financial matters. However, my speciality is business planning, not investing. I know enough to respect other fields and try not to do other people’s jobs for them. I was genuinely looking for someone who could give good advice and let me get on with my own work.
I found the whole experience disappointing. On a positive note its made me become much more actively involved in my own investing and its paid off well. But still, I wouldn’t have minded a bit of proper help too. In the end I concluded that its far too important to put in the hands of rebranded insurance salesmen masquerading as financial planners.
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