How our Financial System is Not Serving You
In wake of the banking royal commission, we really got a rude shock: Australians are not being taken care of with regards to their financial advice needs.
However, are we partly to blame? Clients who invested their super entirely in cash (via AMP) and had fees taking out more than it grew (as found in the Royal Commission) were ill advised, no doubt about that. But analysts and university professors argue that as consumers we must become more financially literate and more aware of financial risks and rewards.
One business school professor in this article claims that too many Australians cannot work out simple math calculations, with regard to percentages.
Complexity plays an even bigger part. A 2017 survey by ASIC revealed that around a third of respondents said dealing with money was stressful or overwhelming. Perhaps that’s why they come to a financial professional in the first place; it is fairly complex after all.
‘Fees for no service’ have passed many of us by, and it continues to be a point for investigation in the royal commission. The reason it has thus far been ignored is because an unfair administration fee is merely a line item on a super statement or insurance account. It does not highlight itself in yellow and say ‘look at me, I’m robbing your nest egg’.
So it is a great idea to keep in touch with the advisor who first gave you some life insurance or super allocation advice, to see if your funds are still on track to meet your objectives, among other reasons.
Luckily, when you are aware of your lifetime goals and know your risk tolerance, you can then go along to an accountant at Team Accounting to get a broad outline of the steps you can take... or perhaps the financial structure you might need. This is such a safe step because accountants cannot legally give specific investment product advice.
Then, if you do want a proper financial plan, a financial advisor who is not affiliated with any particular big fund, i.e. one who charges a fee for service, could be the next step to help plan your financial future. You might as well receive a decent service for the fees you ultimately pay in the line of saving for retirement or insuring your life.