Update (June 2016):
Over 11,000 people have read this article, after searching for information on financial advice fees. If you’re like them, and think you’re overpaying for financial advice (or about to), call me on 1300 369 045 or email email@example.com – and get a second opinion.
At some point over the next year, you may receive 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.
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.