There is an intersting article in the Sydney Morning Herald on what Financial Planners Learn – and don’t learn. Read the article and you probably will steer clear of FPs.
http://www.smh.com.au/news/planning/confessions-of-student-planner/2006/10/02/1159641264881.htmlTerryw
Discover Home Loans
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Hi Terryw,
I read that article a few weeks ago. I’m in almost the exact same position as the author (being an FP with a Dip and doing the Adv. Dip).
Things need to be done to change the industry – whole heartedly agree.
But to say ‘Read the article and you probably will steer clear of FPs’ implies that all FP’s are tarred with the same brush and that they agree and solely relie on what that training teaches them.
Thats just NOT the case.
I know I, as well as many others in the industry, agree that things need to change and though you must have a Dip FP – real unbiased education must come from different sources and on a continued basis.
Just my 2c but it would be wrong to say ‘You’d probably steer clear of brokers as they all align themselves with the lender paying the most commission’. Applies to a few but definately not all.
At the end of the day there needs to be change, just think people must realise you can’t throw a blanket over a whole industry. [happy3]
Hi all
My 2c worth, my hubby’s X has a business helping people with their business plans. She has no training (not even a 6 weeks TAFE course) and 2 failed businesses under her belt!!!! Beats me what GOOD advise she can give?
So, I suggest if you are looking for a FP that you make sure they are registered and have the relevant schooling. I have worked with many Accountants some are really good, some are good, some are average, some are bad.
go armed with a little info and test them. Also, you could check whether they only deal with a certain range of products or if they look else where, outside the box etc.
Celeste
Originally posted by Property WA:Hi Terryw,
I read that article a few weeks ago. I’m in almost the exact same position as the author (being an FP with a Dip and doing the Adv. Dip).
Things need to be done to change the industry – whole heartedly agree.
But to say ‘Read the article and you probably will steer clear of FPs’ implies that all FP’s are tarred with the same brush and that they agree and solely relie on what that training teaches them.
Thats just NOT the case.
I know I, as well as many others in the industry, agree that things need to change and though you must have a Dip FP – real unbiased education must come from different sources and on a continued basis.
Just my 2c but it would be wrong to say ‘You’d probably steer clear of brokers as they all align themselves with the lender paying the most commission’. Applies to a few but definately not all.
At the end of the day there needs to be change, just think people must realise you can’t throw a blanket over a whole industry. [happy3]
Hi Proeprty WA, your right. I was a bit harsh on FPs. Not all are bad. Sorry if I offended you and other members who are FPs. At least you guys know about property.
Terryw
Discover Home Loans
Parramatta
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Just send me a blank email, with “subscribe†in subject line.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Absolutely no offence taken Terry W,
I always read your posts with interest and get a heap of info out of your newsletter.
I couldn’t agree more that the industry needs changing.
As soon as I’ve got the Adv Dip done I’ll be looking for new courses because there’s no way I want to be like the 80 odd% of FP’s that don’t even realise there’s a box to think out of.[smiling]
Thanks Prop
I have often thought about doing that dip FP course myself. It would be interesting even if one were not intending to be a FP.
Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe†in subject line.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi All[biggrin]
I have never read an article that is so full of mistakes and inncorrect asumptions written by a student who has never been an employee in the Financial Planning Industry.
The first mistake he makes is in the first line of the article
“I am working on the sixth of eight modules to obtain my Diploma of Financial Planning and Advanced Diploma of Financial Planningâ€
There are not 8 modules in the process of obtaining the Advanced Diploma of Financial Planning – PS 146 Acreditation = 4 modules, DFP = 4 Modules, Advanced DFP = 4 Modules, this gives a total of 12 modules.
I enjoy the interesting and useful material but I am appalled by the implications of what I am encountering in the course.
This only proves that little and incomplete knowledge is dangerous.
He then continues to show his ignorance of what and how a managed fund works,and discusses the fees and charges associated with funds, somehow coming up with this statement.
There is no discussion of the trade-off between diversification and fees and charges. The more you diversify, the more you pay.
So he is saying that if you have 100% of your asetts in one fund you will pay less in fees than if you have 50 % of your assets equally in two funds.
This is wrong as you pay the same amount in fees for both cases as it is calculated on the total invested,which remains the same (basic arithmetic).You pay the least when you own shares directly. You pay substantially more when you own an index fund.
The idea behind a managed fund is to pay for the expertise and services of the fund managers to increase your return at a lower risk( if you do not have the time or the skills to do so yourself)
Factually 75% of DIY day traders lose their money within 3 years.I could carry on and demolish the rest of the article as I am only one quarter into it however you should have some idea of the quality of the article by now and the basic errors occuring all the way through it.
Terryw
I have often thought about doing that dip FP course myself. It would be interesting even if one were not intending to be a FP.It is very worth while to study for a Dip FP, but remember that just as a course in Mortgage Broking only teaches about the UCCC and supplies information about products it does not teach anything about the real world that good Mortgage Brokers engage in.
A qualification in financial planning will enable you to work in or may aid you working in collaberation with the industry.
It will not give you the right to give financial advice(even if studied at a masters FP level) as only a holder of an Australian Financial Services L icence or Authorised Representative can, and are registered with ASIC to do so.
Regards
Bryce Inglis
AR282821Investment & Implimentation manager
Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
I will have to disagree with you there noddies on a number of issues:
I enjoy the interesting and useful material but I am appalled by the implications of what I am encountering in the course.
This only proves that little and incomplete knowledge is dangerous.He then continues to show his ignorance of what and how a managed fund works,and discusses the fees and charges associated with funds, somehow coming up with this statement.
This is an introduction to the article giving an outline on what it will be about. This doesn’t prove anything, that’s what the rest of the article is for. I’m not sure of your reasoning behind ‘This only proves that little and incomplete knowledge is dangerous’.
There is no discussion of the trade-off between diversification and fees and charges. The more you diversify, the more you pay.
So he is saying that if you have 100% of your asetts in one fund you will pay less in fees than if you have 50 % of your assets equally in two funds.
This is wrong as you pay the same amount in fees for both cases as it is calculated on the total invested,which remains the same (basic arithmetic).You are using basic arithmetic, but you have misinterpreted the paragraph. You are comparing one fund vs two funds. The article is comparing direct shares vs managed funds. The sentence before says: ‘If a client owns shares directly he or she should sell them to invest into a diversified fund’
You pay the least when you own shares directly. You pay substantially more when you own an index fund.
The idea behind a managed fund is to pay for the expertise and services of the fund managers to increase your return at a lower risk( if you do not have the time or the skills to do so yourself)
Factually 75% of DIY day traders lose their money within 3 years.This article does not mention day trading. It is talking about ownership of direct shares. Once again you are bending the article and comparing apples with oranges. The article states:
‘You pay the least when you own shares directly. You pay substantially more when you own an index fund. You pay a third of your assets every 20 years when you own an active fund, assuming 2 per cent a year in fees. If you include tax, you lose another 1 percentage point a year at least. Now you are down to 54 per cent – you have lost 46 per cent to a convenient ideal.’
I agree that you are paying for the expertise of a fund manager when you invest in managed funds. But with the amount of asset value you lose in fees, you had better have a very good fund manager to make up the shortfall!Property WA,
It’s great to hear all the different views on the article but I still agree things need to change.
Also – not to be too picky, but the Adv Dip is only 8 courses. 4 for the Dip and 4 for the Adv Dip ontop of that (there’s an assessment on putting it all together but there’s only 8 courses).
5 down 3 to go for me.
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