To be able to feel truly confident that you can trust your financial adviser, you have to be sure they are able to influence important business decisions that affect you and act in your best interests.
If your financial adviser is a Director or a key senior manager in the financial advice business then they can possibly influence important business decisions that affect you. If they are simply an employee then it is possible they are compelled to follow company policy that they do not fully support and may not be able to share their true feelings with you.
The Future Of Financial Advice (FOFA) Legislation was intended to fix many of the perceived problems associated with Financial Planning. Unfortunately, while large institutions are able to deliver financial planning services and also be involved in the manufacture of in house investment products, FOFA will to a large degree continue to be ineffective.
We have all seen the very effective industry super fund advertisements where the point is clearly suggested that big institutions offering multiple services may not be acting in clients best interests when it comes to superannuation. Keep this in mind if your adviser starts suggesting you access a broader range of in house services.
When considering multiple services from one business, consider whether the business can provide all of the professional services you require, are the absolute best providers of those services and are also the most cost effective? A highly unlikely scenario we would suggest, so always consider comparing another specialist professional in your area of need that is not part of a large institution.
It might be convenient for you to access services from a so called “one stop shop” but you are likely to get better results by allowing your trusted adviser to refer you to other externally road tested professionals where there is great service and knowledge, and no incentives or conflicts of interest associated with the referral. In a large institution, you should expect in house referrals are linked to performance bonuses or other similar incentives which create conflicts of interest.
If you want to play an important role in changing the financial planning landscape for the better, consider distancing yourself from the large financial advice institutions and aligning yourself with a smaller financial advice business but only make the switch if you are confident in the proposal and it makes sound financial sense.
What should you do next? It’s really simple: make contact with us to see how we can help you understand things more clearly. Our clients are very confident in our integrity, knowledge, experience and capabilities.
www.financialadviceshop.com.au
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