Fees

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“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.

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Failing to use a mortgage broker who will refund commission is one of the biggest mistakes people make when they choose a loan. 

Commission refunds are probably the easiest way to put $10,000’s back into your pocket over the life of your loan – reducing your loan term by years, if you use the cash to make additional payments.

It’s the strategy that’s possibly the most effective and least utilised, as not many people know about it, or how to use it properly.

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Investors in Australia have lost about 45% of their returns in management fees over the last 5 years, according to research published last month (check out this article in the Sydney Morning Herald).

How can you lose so much money to fees? Continue Reading

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To many people, commission is a dirty word.  It is synonymous with a back hander or under-the-table payment.

And for good reason.

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What questions can you ask a financial adviser to help ensure you get advice that suits your interests and not theirs? 

There are some great checklists available to help you choose a financial adviser, especially if you have no idea where to start.  But, most focus on basic questions such as experience, professional membership and the services they offer.

While these are helpful as a starting point, they don’t get to the heart of what determines the quality of the advice and service your financial adviser provides.

I think there are a few additional questions you can ask to help ensure you get great advice and support.

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Update (September 2020):

Over 32,000 people have read this article, after searching for information on financial advice fees. If you’re like them, and concerned you’re not getting value for your financial advice, call me on 1300 369 045 or email contact@justinbrand.com.au – and get a second opinion. 

At some point in the last few years, you may have received a Fee Disclosure Statement from your financial planner.  If you know what to look for, this statement will help you work out if your financial adviser is worth their money.

As a part of Future of Financial Advice (FOFA) reforms, all financial planners who charge an ongoing fee for their service must give their clients a Fee Disclosure Statement (let’s call it an FDS).  That’s for any advice fee your planner charges you on an ongoing basis, beyond 12 months.

This law is supposed to ensure you are told what you’ve paid for ongoing services and list what services you actually received. This should help you decide if you’re getting value.

But, the Fee Disclosure Statement is very basic.  You need to ask additional questions to ensure you are not wasting your hard earned money on support that doesn’t benefit you, doesn’t suit your needs or is simply overpriced.

The FDS will give you key information for the preceding 12 months:

•    Fees you have paid for ongoing service
•    Ongoing service you should have received
•    Ongoing service you did receive

So lets look at each section.

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