Costs of Financial Planning Advice

V8ghia,

Let me say, talking and making a difference in the life of Mum and Dad Australia is a joy. I love breaking down financial walls and restraints to show people how to save a dollar. But like I keep saying to my family and friends it is difficult to charge someone on a pension, or with two children and husband has left etc etc.

http://www.birchcorp.com.au

Interesting thread.  A question from a non finance person.  If FP's can no longer earn commissions, and if giving advice should be free, where do they  make their money?

Andrew

I have seen way too much of this in my professional career thus far. 

Trying to prevent honest hard working people from getting ripped off is huge motivating factor for me – it is one of the few things that gets me fired up and want to do something about it!

Hopefully the regulators will get it right without making good quality financial advice too costly for the average punter.

SM

Evolve,

I appreciate your remarks, thank you for your kind words- very professionally responded. 

Terryw,

For the record, I think you knew this would get me going……… My next post will be on trusts and legal structures as some pay-back (I will have the think of something controversial).

http://www.birchcorp.com.au 

Try the August issue – pages 44 to 48

Worth a read. 

You will see a pattern with all the guys featured – I will give you a clue – starts with 'cash' and ends with 'flow'

This is the first time I have actually bought API magazine – it seemed a good read – I just had to ignore the gaping holes in the article about buying (geared) property with your super on pages 78-79.  I guess editorial considerations need to be taken into account!

Sorry – off topic!

I have started last year to have a financial advisor. The way I see it, I pay $3000 a year to have 2 guys I can go to with all my questions and for things I need advice in. Is it worth it? While I’m young and stupid, I think so.

Hopefully in a few years I have made some friends in the right areas so I can have these discussions at the pub rather than in an office. I think the cost of doing it either way would be about the same over a year…

A lot of people on this site are strictly "Property Investors", this is counter intuitive to good Financial Planning advice. Therefor it is no wonder that many would not seek the services of a Financial Planner (even a good one) as it doesn't gel with their mantra.

A financial planner should be looking at and giving weight to all investment classes.

The biggest problem for Financial Planners in my point of view, is the strength of Australian Property over the last 10+ years, a lot of people have done really well out of it and it's meant that a lot of people have forgotten all other asset classes and just choose to invest in property. A financial planner just can't add enough value in this area to make it worthwhile, any advice they did add is likely to be ignored by the majority anyway. 

While there has been some skill involved in investing in property over the last 10+ years, there also has been a lot of luck. We all know what happens when someone gets lucky to often over a long period of time, they begin to define it as the norm and look at it as a normal market characteristic or even begin to believe that they somehow greatly outskill the market. (Much like the way the GFC started).

If there is a slow down in property, or a lot of people get burnt. And property doesn't become such an obvious or the only choice in the future. Financial Planner's will be able to add a lot more value. At this time, I believe people will be much more satisfied to make payment for financial planning services. Obviously the industry has some cleaning up of its own to do first.