Noob question re: Financial Planners/Advisers

acstewart25 · 4 July 2012

Complete novice here however at age 30 with some savings and about to purchase an investment property I think it prudent to invest some other cash and diverse a portfolio into shares. My problem is I need some advice / assitance along the way, yes I'll read books, blogs, etc but I could do with a trusted advisor. So many people saying FA or FP's cant be trusted...but I am nowhere near ready to trust myself in this market!

Does this mean I haven to forget about shares?

Are there people / companies out there who will aid me in investing up to $5k or $10k or even $20k or are they too keen on the big dollars? I.e. will they invest on my behalf, charge me fees and not really 'care' about my investments as they are chasing the big bucks? This is my main concern before starting out. I realise I cannot just invest and watch the rewards, I am looking at this from a long term perspective.

CanOz · 4 July 2012

acstewart25 said:
...but I am nowhere near ready to trust myself in this market!

Does this mean I haven to forget about shares?

Why not keep your money in a longer term account while you learn to invest and take control of your own financial future? Be patient and read, or find a mentor, the markets aren't going anywhere...

CanOz

IFocus · 4 July 2012

CanOz said:
Why not keep your money in a longer term account while you learn to invest and take control of your own financial future? Be patient and read, or find a mentor, the markets aren't going anywhere...

CanOz

+ 1 for Can's advice the only person you can trust with your own money / future.................is you.

Give you 6 months of research and you will know 10 x what any FA will know.

village idiot · 4 July 2012

how come you trust yourself to invest at least several hundred k in property but not 20k in shares?

burglar · 4 July 2012

acstewart25 said:
...but I am nowhere near ready to trust myself in this market! ...

You are right about this market! It is whipsawing like crazy!
Best to wait for a bull market ("Anyone can be a hero in a bull market")

While you wait, you can learn! (right here is the best place I know)

Julia · 4 July 2012

village idiot said:
how come you trust yourself to invest at least several hundred k in property but not 20k in shares?

I'm guessing, of course, but if the OP is about to buy an IP, chances are he has already owned property.
Even if not, most people have an intrinsic sense of comfort about owning the cliched bricks and mortar.
They can see it, touch it, and have observed prices go up in past years.

Without experience of the sharemarket, on the other hand, it can seem so unfamiliar, frightening even.

In answer to the original question, I think most advisers are moving to fee for service model these days, so if you were to consult one with your small amount of capital in mind, you'd probably find the fee would be unacceptably high for what you could reasonably expect to get in terms of advice on how to place that small amount.

CanOz has the best suggestion. Put it in an at call account (see:www.infochoice.com.au) and go to the Beginners' Lounge on this forum for some ideas on where to start educating yourself.

And if you want to understand why there is considerable antipathy toward some financial advisers, have a look at the now monumentally lengthy thread on this forum for Storm Financial.

acstewart25 · 5 July 2012

Thanks to all for the advice - I'll take it on-board and get stuck into some self-education on the topic.

Re property, one of the posters is correct - I already have property and work in Commercial Real Estate so do feel more 'comfortable' in this area. However, like I said, I feel the need to diversify so I'll hit the books (and this forum!).

Cheers

Junior · 5 July 2012

Online Savings Accounts and Term Deposits are at historical highs when compared with the RBA cash rate and CPI....i.e. cash is a pretty good investment right now as you will likely beat inflation by a reasonable margin (before tax).

Park the money in cash or TDs until you are comfortable buying shares, or until you have found an adviser you have confidence in.

Alternatively take a passive approach to share investing and buy ETFs, which will give you low cost exposure to an index. Don't need to research individual stocks...just determine when you believe the market as a whole is oversold or cheap.

DYOR.

kermit345 · 6 July 2012

Hi,

I work as a paraplanner and I can tell you not all financial advisers are crooks, criminals or hopeless with advice. My suggestions would be a combination of reading these forums, doing your own research to educate yourself but also ask around if friends/family know a trustworthy adviser. Also a lot of advisory firms will let you have the first meeting free so if you educate yourself a bit you can ask the right questions and get a feel for the adviser. If your starting with a smaller amount of money maybe also ask if rather then paying an annual retainer fee you can simply pay an hourly fee.

An adviser that simply pumps their own products straight away and doesn't necessarily ask what you want to achieve and how you think you'd like to achieve it is usually a tell tail sign that their just in it for the annual fee and will forget your name 2 minutes after you walk out the door.

If you walked through our door i'm certain given your age we would see an opportunity to build a long relationship as it seems your already on the path to wealth accumulation. Unfortunately in our industry a minority of people have tarnished the name for a lot of others. A lot of people on here are very anti-financial adviser but were not all bad.

Best of luck.

Julia · 20 January 2013

What is the average % fee for financial advisers these days? A friend of mine, 54 year old teacher, wants to retire next year (not eligible for any age pension until age 67) and has seen a financial adviser who has assured him that it will be 'absolutely no problem' to generate $40K p.a. from his base of $500K. On top of that is the adviser fee of 1.3%, i.e. $6500. My friend seems to believe he can achieve this with a 'conservative investment'.

He seems to be basing his trust in this person on the fact that they went to school together.

He is completely financially illiterate and has over the years resisted my attempts to interest him in learning enough so he can at least know what questions to ask and be able to judge the validity of the answers.

Sure, it wouldn't be hard to generate that much from dividends and franking, but he seems to have the impression that his capital investment is bulletproof. Reminds me of the lambs that went to the Storm Financial slaughter.

He has plans to extend his house and do various other money-spending things. No comprehension, it seems, that every time he reduces his capital by such spending, it's capable of generating a bit less.

Garpal Gumnut · 20 January 2013

Julia said:
What is the average % fee for financial advisers these days? A friend of mine, 54 year old teacher, wants to retire next year (not eligible for any age pension until age 67) and has seen a financial adviser who has assured him that it will be 'absolutely no problem' to generate $40K p.a. from his base of $500K. On top of that is the adviser fee of 1.3%, i.e. $6500. My friend seems to believe he can achieve this with a 'conservative investment'.

He seems to be basing his trust in this person on the fact that they went to school together.

He is completely financially illiterate and has over the years resisted my attempts to interest him in learning enough so he can at least know what questions to ask and be able to judge the validity of the answers.

Sure, it wouldn't be hard to generate that much from dividends and franking, but he seems to have the impression that his capital investment is bulletproof. Reminds me of the lambs that went to the Storm Financial slaughter.

He has plans to extend his house and do various other money-spending things. No comprehension, it seems, that every time he reduces his capital by such spending, it's capable of generating a bit less.

I would agree Julia.

Even with divies and franking, and fees, it seems hard to achieve.

Then there is inflation and as you wisely point out, capital risk and depreciation/inflation.

The gold taps in the Financial Advisers dunnies are being reinserted in Townsville again, flash canopies outside, all the usual bling inside.

Storm Mark 2 is on it's way.

gg

rossCaruso12 · 4 June 2018

Might be a bit late on reading through throughout, but definitely seek out a mentor to assist you and guide you in the right directions.

Noob question re: Financial Planners/Advisers

acstewart25

CanOz

Home runs feel good, but base hits pay bills!

IFocus

You are arguing with a Galah

village idiot

burglar

Julia

In Memoriam

acstewart25

Junior

kermit345

Julia

In Memoriam

Garpal Gumnut

Ross Island Hotel

rossCaruso12

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