"Help, I think my financial planner is charging me too much?"
"Help, I think my financial planner is charging me too much?"
We see this all too often.
Each month we have people coming to us for a second opinion, asking “is my financial planner charging me too much?”
To be honest, only you will understand if you are being charged too much.
As what you value from a financial planner is very personal.
Are the benefits you value intangible or tangible?
Many people are looking for intangible benefits, which are more subjective as you can’t touch them or put a dollar value on the benefit. These benefits include; confidence, guidance, assurance & peace of mind. Whereas others are more confident in their financial decision making and are looking for more tangible outcomes, like investment performance, fee savings, tax savings, and achieving their financial goals.
What price do you put on someone putting in place a plan that:
allows you to retire on your terms
saves you over $2,000 p.a. in superannuation fees
helps minimise your capital gains tax liability
ensures you do not pay tax on your retirement savings in retirement
ensures your beneficiaries are not slugged with an inheritance tax upon you passing
monitor your investments and ensure you continue to make informed decisions
stop you from making financial mistakes
provide invaluable aged care advice for you & your loved ones
protect you & your family in the event of injury, illness or death.
Then there are other factors to be considered:
Skill? Service level? How many people touch your data file?
The scope of work included (or more importantly the scope of work not included), how quickly the work is done, whether deadlines are being met, whether the lead financial planner is your contact or have you been passed onto someone else, how comfortable you are in asking them questions, the accuracy of the work – I mean the list truly goes on and on.
Who is giving you advice?
We have had many clients come to us, stating that the financial planner they signed up with is no longer servicing them and providing value.
They have been passed off to a junior financial planner or an admin assistant overseas.
Furthermore, we also had someone come to us for a second opinion after seeking advice from their business coach.
This client had hired a business coach and pays them $1,200 an hour for their advice.
This business coach said that they were paying too much tax and need to buy an investment property on the Gold Coast.
Who has access to your information?
Recently we spoke to a potential client who were was not happy that they were paying $7,700 per annum and were passed around different overseas administration staff. They spoke to 6 different administration staff, looking to get their financial plan implemented 6 months after it being presented.
The client then received this email…
Please find enclosed the SOA fee invoice for $7,700; our record shows that the invoice is outstanding as at today.
There was back and forth, about the contract that was signed, the client believing the work had not been done, so they were not paying for the service, and were still waiting for a reply to emails and phone calls a month ago.
The principal adviser then jumped back in to the emails to say…
As for the invoice, it’s actually due as per the terms of the Statement of Advice or when it is presented and Authority to Proceed is signed off.
I Would appreciate if this could be paid when you have a chance as we are undertaking a very thorough process and would be great to get it all wrapped up soon.
Yet 6 people from business had access to the file, nobody knew the job inside out as everyone had their fingers in the pie, the delivery of the advice was a “dogs breakfast”.
The client finally went back to the principal financial adviser:
To tell you the truth, we are totally disappointed in your whole business & what we have had to deal with!
Your financial plan has only been delivered after my constant reminders to all your staff and the mistakes have been unbelievable!
Another follow up from hearing nothing from you and you deliver this to me.
That is not on when were you going to tell us that!
It’s just not good enough! You have been paid way too much for what we have received. There will be no more payments!
Expensive yes, value NO.
A recent example we had this morning, was a couple who have 2 kids and are currently renting in Adamstown.
With cash at bank earning next to nothing in interest, they are looking at investing $200,000 for the next few years, as with work & family overseas, they are not sure where they will be living in the next few years and do not want to purchase property and be tied to a large debt at the moment.
The financial planner they went to see were going to charge $7,700 for a financial plan that included investing in 3 managed funds.
The financial planner also wanted to move their super funds and charge an ongoing fee to manage their super - after the client stated they did not want to receive advice on superannuation.
Again, this left a bad taste in the clients mouth. Expensive yes, value NO.
So are you getting value from your financial planner?
That question can only be answered by you in conjunction with your financial planner.
Understand what they are doing, understand what work is being done, understand what the expectations are, understand their qualifications, understand their skills, understand what work you are required to do, understand the health of your financial situation and understand if you have foundations that need to be set up before you can consider the sexy investments.
“Your financial plan should be able to
propel you forward, help in decision making & achieve your financial goals.”
If you are not getting value from your financial planner don’t be afraid to ask questions.
If you are scared, embarrassed or don’t want to look silly – then you probably don’t have the right financial planner on your team, and it may be time to seek a second opinion.
