Welcome to the Asset Financial Planners Directory

Your good Advice guide

By BRUCE MADDEN

Unsure about where to find reliable, transparent financial advice? Knowing what you want, who to ask and when to ask is key to a good experience.

If negative press is any guide, investors would be well advised to avoid financial planners.

They've had a bad trot in the public perception stakes lately, caned by a poor showing in a national shadow shopper survey of their industry conducted by the Australian Consumers Association (ACA) and Australian Securities and Investments Commission (ASIC). For more information about the survey, visit www.choice.com.au.

Investment losses in managed funds and customers' superannuation accounts over the past two years have further compounded the industry's woes, as stunned investors are rightly questioning their investment strategies.

To cap it all, the media has revelled in tarring all financial planners as commission-driven product floggers lining their pockets with reckless disregard for customers. Some of which is true, with enough ongoing evidence - including ASIC bannings and the occasional jail term for errant planners - to support this view. Despite this dubious track record, there has never been a better time to find a new financial planner or re-negotiate new terms with an existing one.

Why? Because not all planners are shonks nor "structurally corrupt" as the ACA recently branded them. The ACA's recent shadow shopping survey of 124 financial plans involved a statistically low sample of the 16,000 or so financial planners (and some stockbrokers) in Australia. There is a growing trend towards fee-only advice, and the disclosure of commissions, so-called soft dollar inducements and other commercial interests is now minimum accepted practice.

Nonetheless, the financial planning industry must confront the fact that its customers are largely unhappy. As investors, you should refrain from simply trusting the planning industry's newfound consumer conscience as a reliable sign of a safe and happy future financial planning experience.

Your best advice is to gain knowledge - as much as you can bear or are able to garner. Your first port of call is to get hold of the free booklet produced by ASIC and the Financial Planning Association (FPA) called Don't Kiss Your Money Goodbye. (Contact the FPA on 1800 626 393 for a copy.)

It's basic, but essential reading and is structured as a handy seven step guide to choosing a financial planner through to checking your financial plan. It also guides readers to useful web sites and freecall numbers to gather more information from relevant organisations including ASIC (www.fido.asic. gov.au), the FPA (www.fpa.asn.au) and the Financial Industry Complaints Service (freecall 1800 670 040) to complain about a financial adviser.

Having digested its pearls of wisdom, the next thing is to compile a checklist of what it is you want your financial plan to achieve for you. Remember, it's your money, and no matter how complex the issues, how inane the product offerings or strategies, you still control the ultimate outcome and owe it to yourself to understand the issues.

Tom Collins, a financial planning industry commentator, recommends investors get to know themselves before they go searching for financial advice. "People need to work out what they want. Are they planning for a particular event like retirement or an inheritance? What are their personal goals?" Collins warns that referrals don't always work. "It can be like recommending a great camping spot to someone who hates camping holidays - it doesn't gel," he says.

"See at least three advisers and treat each like a job interview. Find out as much about the adviser and their firm as you can. Do a fact-find on the firm before you go: does it specialise in a particular area like tax minimisation or super, retirement or social security [Centrelink] issues?

"And if they say they do everything, you may wonder..."

He says people should ask about the firm's planning processes, and quiz the adviser about fees and charges "what are my choices, do my circumstances actually require ongoing service?" Collins also offers the tip: "You will get nothing for nothing. If someone offers you that deal, there's a catch." Much of the information you desire of a prospective financial adviser would be covered in his or her Financial Services Guide (FSG), which must be produced by all licensed financial advisers. If they don't produce one, drop them pronto. The FSG would cover important information like the adviser's remuneration (fees and commissions), the adviser's independence (whether he or she is tied to a bank or other financial institution, for example), the type of products on offer and how to go about registering a complaint.

Other questions you should ask of your adviser: What are your applicable qualifications? How do you keep up to date with technical developments/product information? Is the information you rely upon independently sourced? For a list of specific questions go to www.personalinvestor.com.au.

In search of a sound strategy

Meet John Bowen. Married, no debt, his adult kids have left home and he has recently retired, aged 64. Sadly, like many retirees, John is utterly dissatisfied with the financial advice he has received from five separate planning firms - from his local bank to so-called independents - around his home city of Canberra.

John wrongly assumed, after visiting that number of firms and pre-arming himself with information from his local Centrelink office, that he was in with a good chance of finding the right advice fit for his needs. What he got was a lot of mixed messages, inconsistent advice and, just as he was ready to sign with one firm, a whopping upfront fee bill well over the $10,000 mark.

A self-confessed "financial amateur", John's passion is his beloved rugby choir. He wants a straightforward strategy to invest his rollover and provide "reasonable income" through retirement.

He has no grand illusions or extravagant lifestyle needs, and common sense tells him he must invest wisely, maintain realistic expectations, maximise his age pension benefit, and be happy in the knowledge that a professional and trusted adviser is listening to him and taking care of his and wife Jo's wishes.

Problem is, the planning process has let him down. A prime example was the financial plan created by the ClearView financial planning business (a subsidiary of the NRMA group) whereupon John discovered "somewhere like page 76 of an 80 page plan" the 5 per cent upfront fee on the chosen investment products.

"This was not clearly stated to me," he says. "And frankly, after 80 pages, you are bound to miss something."

John is happy to pay for the right advice, but thinks 5 per cent upfront is steep. Meanwhile, his search for sound advice continues, and his superannuation payout remains firmly parked in cash.