It is probably a big mistake to assume that because a financial adviser is not licenced by one of the major banks that there is not a major conflict of interest with the products they recommend.
Consumers who receive financial advice have never had a better time to consider their options as the Royal Commission puts a very clear focus on bank and institutional financial advice licencing, and the potentially major conflicts of interests with their products.
There are many large financial advice institutions who have their own Australian Financial Services Licence and also have a major conflict of interest with the products they continue to recommend and profit from.
There are potentially only three questions that consumers need to initially ask their financial adviser:
- Are you licenced by one of the major banks, AMP or another major institution?
- Do you or your Licencee profit in any way through profit sharing from any of the products you may recommend?
- Are you permitted to call yourself an Independent Financial Adviser?
The problem for most financial advice consumers is that they don’t have a point of reference. It is almost impossible for consumers to read through 100’s of pages of disclosure documents in order to find a few sentences that explain how the financial advice they are receiving is potentially materially conflicted.
People instinctively want to trust others but sadly this is not a sound strategy as it turns your financial future into a lottery: you might get lucky and find a great financial adviser or you might not.
A far sounder strategy is to seek a second or third opinion and from that process work out the questions you really need to ask and have answered.
If the Royal Commission hasn’t motivated you to take action and get a second opinion or third opinion then I’m not sure what will. If you don’t take an interest in your own affairs, rest assured no one else will either.
They say that the definition of insanity is doing the same thing over and over and expecting different results. If this sounds like you then it’s probably time for you to stop doing what you have always done with your financial advice affairs and instead explore ways to do things proactively and very differently for better results.
At The Financial Advice Shop there is something very important that differentiates us from our so called competitors: not only are we an Independent provider of Financial Advice, we don’t want to be known for being big, we want to be known for being awesome so our clients are never just a number.
HOT TIP: The need for honest, practical and Independent financial advice has never been greater, so if you are over 50 and have significant wealth, contact The Financial Advice Shop without delay to see if we can assist with a cost effective Financial Advice Health Check to ensure you better understand all of your future superannuation investment options.
ABOUT THE FINANCIAL ADVICE SHOP: We are a leading, independent and experienced provider of strategic financial planning solutions for the over 50’s with a specific focus on cost effective investment options, and uncovering and explaining your current financial advice conflicts of interest.
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