“Make sure your financial advice is about you.” Article by Steve Marsten

Most people are aware that there are new rules in governing Financial Planners. It’s called FOFA – The Future of Financial Advice. FOFA was introduced to protect consumers from financial planners who defrauded their clients and I don’t doubt that some reforms were necessary. Though the real issue in the Financial Planning Industry is the lack of return taxpayers get from the massive investment of our taxes that is ASIC. ASIC is the government department who have the charter for overseeing the financial services industry. If they were acting on the information in their possession or doing their job – the likes of Storm Financial would not be the stigmatic issue that hangs over the industry today. They should have acted long before Storm fell over. Interestingly enough – the whole industry has paid the price while the owners of storm have yet to be brought to trial.

We are still seeing ads encouraging people to use Industry Based superfunds yet you never see ads for the financial planning industry who, on the whole – do take the clients objectives into account and ensure their investments align with what their goals are and most of all – have the clients best interests at heart.

It is a shame that many people under the age of 30 are not investing in their future correctly and are taking advice from the internet or Facebook or TV advertising, neither of which takes their personal circumstances into account. Further many have signed on to Industry Superfunds without any consideration for the type of investor they are or been advised of the ramifications of the type of investments they are investing in. Such advice is cheap and the outcomes are often cheaper!

The impact of the FOFA reforms is to add an incredible level of red tape on the planner which takes the cost of preparing plans higher. ASIC have come out and advised that the cost of preparing a plan should be $2,500 to $3,500 per client. This is a broad brush approach and you can usually get better value then that. This does not include the implementation of the plan.

At Sothertons and Professional Investment Services all work is quoted upfront before commencement. Contact us today on 07 4972 1300.