Finding an Adviser
Some conflicts of interest which financial planners had have been addressed in regulation, but one remains.
Well over 80 per cent of financial planners/advisers work for places that manufacture their own investment products. Guess what the consumer who consults these advisers/planners mostly ends up putting their money into?
It’s like walking into a Ford dealership to buy a car. You’re most likely to drive out in a Ford.
So do you stay clear of a financial adviser whose company manufactures the investment product they recommend to you?
In a perfect world you would stay clear. But what if you live somewhere where the only financial advisers are financial advisers who recommend products their company manufactures?
Perhaps you should still use them.
Think of the process of finding a financial adviser, as having to find a plumber to fix a bad leak.
A good plumber is hard to find. But you are not going to put up with a bad leak. You are going to find a plumber who can do the job. If that plumber charges like a bull, you’ll cop that as well, because that leak must be fixed.
It’s the same with a financial adviser. Having your money in term deposits these days means you have a bad leak. It’s not water that’s escaping, but money. The interest on your term deposit barely covers inflation.
Generally speaking even a financial adviser who picks investment products manufactured by their own company can fix your leak.