3 Tips to Avoid a Dodgy Financial Planner

17 May 2018 04:03 AM

The Royal Commission has certainly churned up the sleaze in the financial planning community. I have read with horror how financial planners at the big banks have wrecked clients’ life savings siphoned funds into bank products and charged exorbitant fees for no service. My favourite was that they actually continued to charge clients that had died several years prior.

Shocking, but not surprising! While the vast majority of independent financial planners are decent human beings, aiming to do the best for their clients and build long term businesses, there has been a certain bad element for decades. ‘Every day discovering something brand new’ is a cute line in an Ed Sheeran song but stinks of political motivations when spoken by a government regulator.

Here are 3 tips to avoid a dodgy financial planner:

1. Independence

If you go into a bank and ask for a recommendation. What are the chances that they are not going to offer you the bank’s products? If you want real advice as to what is right for you, you have to go to someone independent, and who doesn’t get a fee from the product provider. This may be a little more expensive in the short term, but long term the value is far greater.

2. Transparency

Ask for the documents, calculations and worked examples. If you hear the words ‘trust me’, ‘believe me’, ‘I promise you’ or ‘there is no risk’ hit the panic button and run for the door.

3. Simplicity

I am a firm believer in the 10 year old test. If it can’t be explained to a 10 year old – don’t do it! The more complex a financial product, the more opportunities there are to hide things. Never invest in something that you don’t understand.

If you follow these tips,” Trust me, there is no risk in going to see a financial planner”. More seriously, if you have a super fund or insurance product with one of the big banks, please get in touch.

For a confidential discussion on your personal situation, get in touch with Marisa on: 0416538227 or marisa@onelifefinancial.com.au.

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