I recently got in contact with a reputable financial advsior (specialising in property investing) and was told that advice, direction and ongoing support would cost me around $3,000 – $3,500k.
Another reputable advisor (not specialising in anything) told me that he charges $145 per consultation. This seems like a huge difference, is the first company ripping people off or is this a the price you pay for good advice?
Lena
Hey alotti,
I’m an FP myself, but more so involved in raising capital than generic financial planning (just making sure it’s clear I’m not chasing business)
There’s three main ways an adviser will charge –
1) Commission
2) Hourly / Per Consultation Fee
3) Upfront & Ongoing Fee for adviceThe first quote you got ($3,000) is an example of 3) and obviously the second of your quotes, highlights method 2).
Thats the first thing to understand. Because there’s not set way in which all advisers charge there’s constantly discrepencies.
I know alot of advisers who’d charge even more, say $5K, for initial ‘plan’ and then maybe $500pa. If they are going to charge you that, or if the $3,000-$3,500 you noted is a per annum charge – they better be making you 5 times that or helping you protect what you’ve got as well.
There’s no set fee to compare to but I’d say (and you could check the Financial Planning Association) that $145per consulation(hour) is a pretty good price for that method of charging. Usually between $150-$300.
Again – it all varies so it can make it difficult.
At the end of the day
– get down to detail on what you’ll get
– how many clients do they have (so you get an idea of how time your gonna get if your paying an annual fee)
– shop aroundAnd above all feel comfortable with what your paying and know that if it does’nt add up – you’ve got a clear, unexpensive exit fee.
Hope that helps – gee I go on sometimes. [smiling]
I always thought the cheaper/free financial advisors would reccomend commission based products (like retail super funds).
I thought the independant advisors would actually reccomend the best product available for you (like industry super funds)
As I understand it, the free financial advice usually costs you more in ongoing fees and reduced internal rates of return from the products offered.
I disagree with you “prop WA, that the “expensive” advisors had better make you % times more….. My beleif is that the FREE financial advice would actually cost you 5 times over if anything.
However prop WA, you do have some very good suggestions!!
“””””At the end of the day
– get down to detail on what you’ll get
– how many clients do they have (so you get an idea of how time your gonna get if your paying an annual fee)
– shop aroundAnd above all feel comfortable with what your paying and know that if it does’nt add up – you’ve got a clear, unexpensive exit fee.”””””
I go to a financial advisor that charges about $1500, this comes out of my superfund and the advisor only gets paid wages , NO COMMISSIONS.
don’t be fooled.
Live, Learn and GrowLifexperience
This is only for basic advice though, not for specialised property investing advisors.
Tell us more alotti about what these advisors claim to offer you as a client and why that appeals??
Thanks for the advice guys [oink]
LifeX, this company appeals because I’ve read 2 of the principal director’s books and so I feel that I can trust them. The other advisor I called is also a published author, I’m not sure if I’m allowed to say their names!
I feel that this industry has too many people trying to sell something to naive people like myself so I need someone who has a good reputation. Any recommendations from people here would also help! [blush2]
Alotti
Anyone can publish a book.
Would a better yardstick be to get them to tell you about their personal wealth and see how successful they had been in their own business.
I never have a problem showing clients a copy of my A & L sheet albeit personal details maybe removed.
As Property Wa mentioned there are 3 types of adviser yu need to ascertain what yu want and expect from your FA and then weight up which route you wish to follow.
Bye the way this is not a toute for business either.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner.
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
my advice , if you are interested in Property and investing is to choose yourself as your principal financial advisor.
Educate yourself and research all your investments. This will help you in the long run.
Live, Learn and GrowLifexperience
That’s great, thanks everyone.
Richard you have a very good point, if the adviser has his/her own succesful investment portfolio then they must be good at their job.
Alotti, the one question this also raises is, if they are successful investors why are they doing other peoples profiles and not working on their own full time?
Be sure that the assets they show in their A+L spreadsheet do include liabilities clearly and the LVR. If they are too heavily geared in their portfolio, that in itself shows they need to fund it externally, hence the J.O.B.(just over broke!!).
So just temper their advice with their actual position. Mainly make informed decisions and follow your instincts. You wont go far wrong.
Good Luck
DD
Buyers Agent (Dip Financial Services(FP)
Don’t sweat the small stuff,and it’s all small stuff!!I could not agree more with LifeX on educating yourself along the way before making a calculated decision on which Financial Planner is worth their fee.
It is not just the right asset mix tailored to your specific needs to plan for wealth creation strategy, but also looking in depth the asset protection and estate planning to fully appreciate them all.
I do not condemn all FP; although there are some bad apples out there exist only by ripping people off by showing them ‘safe and sound’ recommended managed products whilst feeding fear on our lack of time and knowledge to take action ourselves. Most prospectus can be manipulated to suit the purpose.
If you look hard enough, like I did, you’ll find one. They stand out from the generic FP like a sore thumb. Integrity is something FP can’t buy.
Having said that, I have yet to meet with the FP, as I am heavily investing in educating myself to ask the right questions when I do see him. Why waste precious time and money for information you can get from books? I’ve got plenty of suggestions on great books from this forum alone.
All the best alotti.
CT
Hi alotti / Lena,
Could you please let us know how you go with the FPs and their willingness to show you their balance sheet (net worth).
Regards,
Mark
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