Bank Financial adviser. Are they worse or better???

Hi everybody,

I am wondering if anyone has an experience/advice on financial adviser - working for an financial institution (Credit Unions or Bank).

They get paid by wage and bonus(calculated by number of clients and client's satisfaction levels).

No fee or commission goes to them directly. Dose He still push to sell specific products(e.g. managed fund, insurance, etc)?

If they advise to invest in a managed fund or take an insurance,
what do I need to ask and check to make sure he is working for my best interest ?

Thanks a lot.

 

They will be pushing products behind their own bank.

Be careful.

 

Thanks Terry,

I think you're right.

Below are the advices given to me. I hope this will help others.

1. Change my Superfund to another. - which the bank has a "kind" of business deal with. They didn't tell me exactly what kind of deal they had.

2. Take an insurance to cover 500K debt - I don't understand as I only have 250K mortgage and I don't have any other debt.

3. Open a Managed Fund to where my Superfund will be. MF and SF will be exactly into the same product. - is this a good thing to do? I thought "diversifying" is a good thing to do.

Anyway, I am not going back to them or any other financial adviser at this stage.

 

Financial advice is important but be careful!!

Hi Guys,

I would most certainly recommend to avoid institutionally aligned (Bank, credit union, super fund) advisers. Firstly because they work with their own products and secondly I believe the quality of advice that independent firms provide is at a higher level.

I believe there are too many under qualified advisers in the industry and would recommend that you seek an adviser with the CFP (certified financial planner) designation. This is the highest professional designation in the industry and the difference between a CFP and non CFP adviser is considerable. It also shows that the adviser is driven and wants to be at the top of their industry.

I also think that the benefits of quality financial advice are under rated. A good adviser will focus on strategy and your personal situation as opposed to just investments.

Midou, although I have just bagged bank advisers and I suggest you see an independent adviser I would focus on the following in relation to the advice you were given.

1. Is the SF change giving you a benefit? (lower fees, better investment options, better admin service.....) Who cares if the adviser has a "business relationship" as long as you are better off!

2. Insurance isn't just about covering debt it can also include future income loss, children's education, extra care, holidays, time off work for your spouse..
The adviser should have had these discussions with you and provided reasons for the 500k sum.

3. It is more important that your funds are diversified across asset classes (shares, property, fixed interest...). There is fund manager risk which diversification can help minimise however being invested with reputable fund managers with strong performance history is more important.


I hope this has helped, I have some experience in the industry so feel free to drop me an email or reply to the post if you have any more issues.

Michael

 

All financial advisers are a waste of your money, and talk a lot of hot air.

There is nothing they can "advise" you on that you can't find out for yourself with a bit of research and self-knowledge. The problem with the majority of people is that they blindly give all their savings and assets to some clown because they've recommended it to be the best strategy for their personal situation.

The thing with advisers is they do not know any more than the next person when it comes to investing and they certainly do not know what is going to happen in the markets - because no one does.

To add to this, they try to flog products onto you as well as push the need to get insurance. The topic of diversification is another doozy as well.....diversifying your share portfolio across all different sectors of the market doesn't help one bit when we're in a bear markets and every stock in the index is falling.

Financial advisers don't like property investing either because their is no money in it for them - unless they have something going on with the mortgage lender. Aussie home loans is like that (though a mortgage broker). CBA has ownership of them and its no surprise they flog CBA mortgages claiming they are the only ones that are suitable [for me]. I turned them down when they told me that.

But back to the advisers, usually they will recommend you put some savings in an interest bearing account to save for a deposit for the next 5 years whilst putting your money in shares and managed funds and taking out a margin loan to buy more shares - but make sure you get the insurance because heaven forbid something happens to you and you leave your dependents with all these investments.

 

Hi Michael

I agree with your comments except about the CFP designation.

I am fully qualified to provide financial advice but I am not a CFP and I have no intention of obtaining a CFP designation.

So what is the considerable difference you mention, between yourself (CFP) and me (not CFP)?

I believe my knowledge and skills in the areas that I specialise (super and insurance) are far better than most financial advisers, including any CFP. My knowledge and skills are obtained through training and experience.

Kind Regards

 

Hi builder2818

Your comment below should have the word "All" changed to "Most", as there are some (perhaps not many) financial advisers who provide value for money, myself included.

It's a challenge for me to keep up with all the changes to tax, Centrelink, super, investments etc and it's my full time job. How are you going to keep up to date?

I would agree that most financial advisers don't know how to invest in a way that provides value to the client, that is beat the market. For direct share investing, I use an investment method similar to that used by Warren Buffett. Take a look at this link: Warren Buffett Investment Method

Kind Regards

 

I agree with Andrew.

I am a member of a few societies/associations and there seems to be a trend where the society establishes a special designation which costs several hundred dollars extra per year. This seems like a money generating exercise itself, but then they have extra requirements to do more continuing eduction points each year to maintain these designations. As a 'sepcialist' you have to keep more 'up to date' than the average practitioner. And gues what - these associations run courses, for fees of course. There is one tax one I am a member of and it costs about $500 per year for the membership and then you need 30 hours study at approx $100 per hour. Same with Law Society, 10 hours per year or 30 hour for specialist. SMSF specialists too, financial planning etc etc.

What does it all mean? A so called specialist may be a bit more course educated but there could still be non specialists out there who are more practical and are 'better'.

 

Thanks Terry.

The public don't really understand how these designations work.

Kind Regards

 

LOL!!! Where do I sign your paraplanners SOA?

 

Hi builder2818

All the best with your "research and self-knowledge" strategy.

Kind Regards