Assuming you are one of the 80% of Australians without a financial adviser, where would you go for investment advice?
In the old days, the minute the money hit your bank account the branch would swing into gear and the deposit would probably end up in a suite of bank products they hope will help meet staff revenue targets. After fees and costs your money would be working for you (and the bank).
Your bank can no longer help you. Following the Hayne inquiry into misconduct, they have all left “financial advice” leaving a lot of money on the table. ASIC reported that as of 30 June 2021, AMP, ANZ, CBA, Macquarie, NAB and Westpac have paid a total of $1.86 billion in compensation for bad advice.
You fall back on the advice of friends. Some have made a killing on Crypto and others have seen their property value double in a year. After the fifth beer at your mate’s barbeque, you resolve to invest a third in crypto and the balance in a unit in Queensland.
Your generation “X to Z” children have started dabbling in finance. They watch YouTube and TikTok videos (known as “Fintok”) and join online “chat rooms”. They are certain debt and environmental damage make a small holding, powered by renewables the best investment.
You go online and Google “financial advice” and look at a few of the advice firms that appear on page 1. Most seem “pamphlet sites”, all declaring a passion for helping people achieve their goals. They are licensed professionals though … is it worth the investment? How do you choose one? The government’s Money Smart web site has a lot of helpful information but it’s not easy.
Should you try robo advice? You Google “Robo advice” and find advisers like Stockspot will ask a few easy questions and have your money working for you quickly and at a relatively low cost. This is new though and a little scary.
Should you use a site like Finchat to educate yourself and try out different scenarios?
The bank’s exit has left a vacuum in financial advice compounded by the exit of many advisers. Synchron director Don Trapnell noted that 6,500 advisers have left the sector in the last two years, while only 163 have joined.
Where do you get advice?