With all the ‘noise’ about financial services that’s forever in the media, we’re sure you’ve heard us suggest you turn a deaf ear to it. But with the volume amped up extra high in recent weeks due to the Royal Commission, we feel the time’s come to share our 2 cents worth.
Lots we already knew
Many of the criticisms levelled at the “Big 4” banks are things we’ve been harping on about for many years.
A key one is how many advisory services supplied by banks (or advisory groups owned by them) frequently bury their fees in the bank-branded products sold to consumers.
Countless times we’ve reviewed super and investment statements etc with prospective new clients – pointing out substantial fees they’ve been paying – often without them realising they were doing so.
How we’re different: For wealth management advisory and insurance services, we charge a stated fee, not commission. You know what you’re paying upfront, and there are no lock-in contracts.
It’s nice not to be owned by a bank
Did you know that around 90% of financial advisers are employed by a bank/financial institution (or an associated dealer group)? Related to this is the hot topic of “vertical integration”: the practice whereby banks both make and sell financial products. In giving evidence to the Royal Commission, corporate regulator Peter Kell said the practice was “inherently conflicted”.
How we’re different: 5 Financial is NOT owned by a bank or financial institution. Instead it’s 100% owned by people who work in our business. It’s also worth noting that we do not have any ownership/interest in any products or third parties we recommend.
By not being aligned with a bank or financial institution, we’re free to look broadly in the market place for financial products that serve your best interests – and that’s what we do.
Fee for service
Much of the media noise has been devoted to the so-called “Fee for NO service” allegedly charged by a big institution over an extended period. Our understanding is that in many cases the client was sold a financial product, and that was the last they heard of the adviser.
How we’re different: For clients of 5 Financial, the financial plan we develop for you is customised to your unique circumstances and goals. And with an integrated offering that includes wealth management, personal insurance, finance, tax and estate planning, we take a holistic, long-term view. You’re invited to meet at least annually for a review meeting so we can revisit and reset your financial plan based on your current situation and objectives. At this meeting, we quantify the value our services have delivered via our “Value of Advice” document.
We also encourage (and expect!) you to contact us during the year if you’re contemplating a decision that will significantly affect your finances. Beyond this, there are many behind-the-scene services our team undertakes on your behalf during the year. Finally, you’re asked to ‘opt-in’ to our services annually, when we’re only required to do so every second year, and you’re free to walk away at any time.
There are many additional topics we could write about, but without wishing to make this “War & Peace”, we’ll leave it at that for now.
If you do have any questions about what we’ve raised here – or anything related to your finances – we hope you’ll make contact.
Our goal in the work we do with clients is to help you reach each of your goals with clarity and certainty, and we hope to have the opportunity to speak.
Contact us to find out more.