“He was actually a little uncomfortable and embarrassed”.
Last week I was contacted by Ross, a lawyer in Melbourne, who was concerned he was being charged unfairly for financial advice. He told me that his planner seemed “uncomfortable and embarrassed” about the fees he was obliged to charge.
Ross used the words “fee grab” to describe his current financial planning company’s new policy to charge an asset based fee (brokerage) for switching managed funds.
Financial planners need to charge for their advice and service. But in Ross’s eyes, this fee seemed to be excessive and incidental to the service.
But this fee is not what gets me worked up.
Ross‘s financial planner seemed to think this fee was disproportional to the value his company was providing for this transaction.
It’s hard not to conclude that this financial planner is putting the interests of his employer, and in turn his own interests, before his client’s.
You need to trust that your financial planner has your best interests at heart. Or at least, that they can find a happy balance between their interests and your own.
Ross feels that his financial planning company has lost touch with his needs and interests. He has good reason to think this new fee policy is the result of that company’s focus on profit, at the expense of ensuring Ross is getting value for money.
Every fee has an impact on your wealth. So you need to make sure any charge is fair and that you’re getting real value.
Usually, your advisor has a good idea if their fees are reasonable. By the same token, your advisor will know if their fees are likely to have a detrimental effect on your financial health.
If you are not confident you are getting value for money, do some research and find out.
But most importantly, if your financial planner is “uncomfortable and embarrassed” about their own fees, then find another advisor.