Question by Mat C: Financial Planning?
I got a few questions about a career in Financial Planning.

1) What are some good firms located in Sydney/Australia.
2) What are the odds of getting a Financial Planning job in Sydney?
3) Is Financial Planning a job that not many people do, for example, lots of people do Hairdressing, making it hard to get into, what is Financial Planning like in that terms?
If you can only answer 1 of these questions that is still cool.
Thanks, lol.

Best answer:

Answer by csanda
Almost all the investment bank (Macquarie) and commercial banks (ANZ) offer financial planning services.
2) If you don’t mind being a grunt, then the chances are good. However, if you want a good, front-line job that pays well – then you need experience. Remember, you have to tell people who have the experience and business acumen to MAKE lots of money what to do with their money. If you’re a fresher, you’re going to have to set your sights lower.
3) It is a hugely commoditized business service. There are tens of thousands of people in the business. I know. I own a financial planning business on the side. It’s very, very, very competitive.

Give your answer to this question below!

Question by Vivian Yu: Career in financial planning in different countries?
I am now working as a paraplanner in Australia. However, my husband is working in China and I really want to be with him. But I do not want to give up my career as I believe that financial planning is a great career and I am so happy with my job. I have no idea about the Chinese market. Could I find a financial planning job there? How much will I be paid?

Best answer:

Answer by willmerr
Get HIM to come over, unless you think that living in China somehow beats living in Australia.

Add your own answer in the comments!

How To Find The Right Financial Planner For You And Your Business?

Financial planning seems to be more important than ever these days. Few would have imagined the catastrophic changes that we are seeing all around us, the “too big to fail” failures and the highly publicized fraud cases. Many people and businesses have suffered lasting damage and understand that their definition of security has changed almost overnight. Against this backdrop, the selection of a financial planner takes on additional urgency and must be approached with some care, if we are to avoid some of the pitfalls and past performance horrors that are all too fresh in our minds.

Many make the mistake of looking at a designation, those three or four letters after the professional’s name, assuming that their very presence is enough. Nothing could be further from the truth and we need to understand that there are many different qualifications and “horses for courses.” Make sure that your professional is best qualified to help you with your primary goal, to start off with. Further than that, though, you do need to choose an advisor who is able to help you view the bigger picture. Is he or she able to work with other professionals, such as life insurance agents or attorneys to pull together your plan? Often financial planning is more about life planning, and individual elements cannot be viewed in a vacuum.

Try and select a financial advisor who most closely mirrors your situation insofar as experience, track record, understanding and ability are concerned. You really need a financial coach to help you build a plan or indeed to help you resurrect your damaged dreams. You will need advice on taxation, insurance and money management.

It is important to understand the professional’s fee structure before you start as there is a big divergence. While some opt to charge a quoted fee, others will suggest a percentage of the asset value covered and some might earn commissions from the financial products that they initiate and manage. Be aware of this latter option and seek for clarity to unearth any potential clash of interests.

Thousands of people have lost a sizeable part of their assets due to their involvement with professionals who have subsequently been charged with fraudulent activity and have achieved notoriety in doing so. Your due diligence will include a lot of research, the gathering of testimonials and the checking of references. It is fairly easy these days to find out if any ethics actions have being taken against a professional by contacting the relevant board, or by just doing a targeted Internet search. Once you have asked all your questions and completed all your research, make sure that you have a very frank discussion with your financial planner and confirm everything in writing before you agree to move forward.

In a complex work environment, daily activities require an interaction between all members of the organization. While each employee from the most senior level to the most junior has his or her specific job description and requirements to uphold, each contributes toward the overall goal and should one element be out of place then the overall cohesiveness of the business operation is likely to suffer.

We do not of course live in a fully automated world, where robots control every element or complete every facet of the operation and thus many additional human factors come into play, including personalities, experience, ability, objective, ambition and there are many influences from the outside world including personal issues and agendas. Management can face a dilemma trying to correlate all this information together to enable them to direct the corporate ship as best as possible. In recent times a format known as a 360 degree evaluation has found favor when trying to analyze individual performance and to put together a common direction.

The concept of a 360 degree evaluation is to provide input from everyone who has an involvement in the work environment where the reviewed employee is stationed. This means that an input will be sought from peers as well as supervisors and management and each person will be asked to honestly review according to a given set of criteria. Reviews received in this way are anonymous, as they are all grouped together into a final summary of sorts, which will be analyzed by management before the “summit” meeting with the reviewer.

Top 6 Myths About Financial Planning

There’s a lot of misconception about financial planning and how it can help you.  Here is a list of the top 6 myths surrounding financial planning.  We hope that by dispelling some of these common myths you can get a better understanding of financial advisers and how they can assist you to achieving financial prosperity and security.

Myth #1: Only people who have already accumulated wealth and/or assets can see a financial adviser

This is one of the biggest myths surrounding seeking professional financial advice.  Most people believe that you need to have already established yourself financially before a financial planner can help you.  Some financial advisers will only want to work with you if you have some established assets as by advising you on how to allocate this wealth this allows them to be paid.  At Financial Spectrum, our financial advisers are fee-for-service, or charge a flat fee instead of earning a commission.  This means that they are able to assist you in accumulating wealth through things such as setting up savings plans and budgeting, whereas other advisers won’t as they wouldn’t earn a commission for this advice.  The value of advice at the early stages of your life can be just as great, if not greater than when you have already built up your wealth.

Myth #2: Financial Planners just sell their clients managed funds

Many people believe that financial planners just sell managed funds to their clients.  This isn’t true.  Whilst a financial adviser can recommend their clients invest in specific investments as one tool to help grow their wealth, a holistic financial planner will look at areas such as debt reduction, tax minimisation, property, shares, superannuation, insurance, and cash flow just to name a few.  All of these areas are important when looking to grow and secure wealth – not just investing into products.  Some financial advisers have a greater emphasis on placing their clients into managed funds as this provides them with payment via a commission.  This perhaps may explain why this myth is a common one.  Not all financial advisers are equal however.  Financial Spectrum is in the minority when it comes to offering clients truly holistic advice.  Because Financial Spectrum doesn’t earn commissions, its’ financial advisers place just as much emphasis on areas such as paying less tax and budgeting, as placing clients in managed fund investments. 

Myth #3: I’ve already got an accountant, so I don’t need a financial planner.

Many people already have an accountant that they know and trust for their financial needs so they don’t think that they would benefit from seeking the services of a financial planner.  What most people don’t understand however, is that although it is very important that accountants and financial planners work together in partnership, both fulfil very different needs.  Financial advisers are trained to take a more holistic approach to your finances than accountants are.  Whereas an accountant will complete your tax return or offer advice for small business, a financial planner will work with you on understanding your life goals and help to implement a financial plan to help you achieve them.

At Financial Spectrum, we work closely in partnership with accountants to ensure that our clients receive the benefit of a team approach.

Myth #4: I don’t need a financial planner – I’m nowhere near close to retirement

A common misconception is that financial planners are only to help retirees or people starting to think about retiring.  This is very far from the truth!  Whilst it is true that there are many financial advisory firms whose target market are retirees, at Financial Spectrum we believe the true value of financial advice can be gained by starting early.  Most of our clients are younger professionals in their 20s, 30s and 40s who are at the accumulation stage of their lives.  We know that we are in the minority when it comes to our competitors but we are passionate about helping young Australians get ahead financially.  We help our clients to map out the goals they want to achieve in the short, medium and long term, and work with them to implement a financial plan to help achieve these goals.  Time is your biggest ally when it comes to setting yourself up financially – so don’t wait until you are in your 50s and 60s to start planning for the future! 

Myth #5: Financial planners charge too much and get hefty kickbacks from companies they recommend their clients invest in

Financial planners have received a lot of bad press over the years and the result is that many Australians have a very negative view of the trustworthiness of the financial planning industry.  In truth, individuals authorised to provide financial advice to people in Australia are bound by strict regulations from the Australian Securities and Investments Commission (ASIC).  All remuneration received by implementing a proposed financial plan must be clearly outlined in a Statement of Advice (SoA) which must be given to the client.  This enables transparency in the financial planning process so that you know exactly how much your financial adviser will be paid in relation to your financial plan.

At Financial Spectrum, we’ve gone one step further and developed a fee-for-service or a fixed fee payment structure so that we don’t receive any commissions from any investment product that we recommend to our clients.  This means that our clients pay for our advice.  We believe that this fee structure helps to protect our clients from potential conflicts of interest.  In addition we offer a range of packages for our clients to select from so that they can feel comfortable that they’re getting value for money.

Myth #6: All financial advisers are the same.  Shouldn’t I just see the adviser at my bank branch?

There are financial advisers, and then there are financial advisers.  Whilst it’s true that all financial planners in Australia must be authorised under a financial planning licence from ASIC, it is important to know that there are potential conflicts of interest that may arise by seeking the services of a financial adviser who is connected to a large institution – be that a bank or other financial institution.  Why?  Financial advisers who are part of financial institutions who offer their own financial products (eg. life insurance and investments) will likely be restricted to a small selection of products that they can offer their clients.  This means that if you went to Bank XYZ seeking advice and the financial planner at Bank XYZ identified that you need income protection – it is likely that they’ll be restricted by the XYZ Bank to only provide you with advice to obtain an XYZ Income Protection policy.  The problem is that your XYZ financial adviser might know that a better policy for your situation can be provided to you by ABC Life Insurance, but because they are part of the XYZ institution, they can’t offer this policy to you.

The good news is that not all financial advisers in Australia are part of large corporations and therefore are better able to provide you with a wider selection of investment and insurance products from a range of providers in Australia.  These financial advisers tend to be known as “boutique” or “privately-owned” financial planning firms as ASIC restricts the use of the word “independent”.  These small boutique financial advisory firms are in the minority as many have been bought out by the larger institutions and do not have the massive monetary resources of their competitors, but they are out there and can offer you great financial advice.  Financial Spectrum is one such privately-owned financial planning firm based in the Sydney CBD.

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Financial Planning

Financial planning

Everyone needs money for his or her sustenance, comfort and old age. Does the hard earned money really used for this purpose? How many of us still try hard to make ends meet just to fulfill every months basic needs? When this is the case how can we save money from the meager income that we get? How much is really too much money? How can we grow or make optimal use of the finance that we normally handle? Questions like this cloud our minds most often as we fail to manage our finances efficiently.

Who we are or how much we earn is of less concern as long as we can manage and plan our finances wisely. A pauper can become rich and a rich man can suddenly lose his wealth if his financial planning is improper. Usually people blame their stars for their misfortune. They go in search of astrologers who will live out of them by changing their names and houses. They find solace in blaming others be it God or stars for their backdrop. Insecurity and thoughts of one’s future might lead to depression and frustration.

“Make hay while the sunshine’s” as the popular saying goes is the golden rule every human being should definitely follow. We earn to live happily with comforts but we forget to pay ourselves for all the hard work we put in. we pay for everything in this world, do we pay ourselves for the service we do to our family, nation and society.

In the western countries they make it a habit to save 10% of their personal income for their own future use, a millionaire once said, “I am glad I am worth at least 10% of what I earn”.

Better late than never, just sit with a planner and take stock of where you are now. Jot down your financial position as of today. Set long time and short time goals in life and set a imeline to achieve that goal in time. Then carefully think about how you can achieve the goal and what you can do to go where you want to go. Attitude is very important in any major life changes that you might ncounter. Thus set your attitude as if you are planning a vacation. So you first decide the vacation spot, and then set out to make reservations, then pack

your bag and then leave.

Financial planning is just like your vacation planning. First you should fix your target, then make certain changes in your life style, like cutting down your pizza or sacrificing your cigars, then pack up or wind up your extra expenses and start the savings plan when that is dome just relax and enjoy the fruits of your unparallel and diplomatic achievement. Your money will start growing and so will your self-esteem and self-confidence and finally you are efficient and capable to finance your kids higher studies or retire peacefully with the recurring income from the timely savings.

Financial planning provides the reassurance that your future in Canada and all around the world that secures you to live in the comfort as you would like.

Credit cards are one of the most convenient financial tools a consumer can possess. They are convenient; more secure than cheques; eliminate the need to carry large amounts of cash and, can be used anywhere around the world.

Consumers who use certain credit cards are also eligible for frequent flyer points, reward schemes, gifts and other types of incentives which aim to encourage the continued use of a credit card to make purchases. There is also a grace period of anywhere between 20 to 50 days to pay the balance of the accountin full. In other words, 20 to 50 days of free money!

However, the down side of credit cards is that if the consumer does not pay off the balance in full by the due date, hefty interest rates are imposed on the outstanding amount.

The consumer may not be aware that the nominal interest rate, of say, 12% p.a. may default to a higher rate of, 20% (for example), if they miss a payment. The consumer is then charged the full interest rate on the entire outstanding amount, which also includes any new subsequent purchases made using the same credit card.

The end result is that the consumer can become financially strangled by the ever-increasing interest debt and in some cases this can lead to bankruptcy.

But, here is something interesting, the average consumer who uses a credit card also has some type of investment portfolio – whether it is a managed fund, pension/superannuation scheme, life insurance or unit trust.These funds pay an ongoing trailing commission to a third party, namely a financial adviser.

The financial adviser is being paid a trailing commission because in theory he/she is supposed to keep the investor regularly up to date on their investment portfolio and give ongoing financial advice about the investment. But, what happens if the financial adviser has not had any meaningful contact with the investor except for the one and only time they met to sign up for the investment scheme?

The truth is, the financial adviser keeps receiving the commission for the entire duration of the investment and, the consumer/investor gets absolutely zero value out of the deal! Furthermore, every bit of commission paid out to the adviser comes out of the investor’s account.

Imagine if you could retrieve these commissions and redirect them to your credit card account for the purpose of reducing your interest debt. It is estimated that there is about $2.4billion of trailingcommissions generated annually in Australia. This is about $1200 per head of population! Wouldn’t it be put to better use if it could be redirected to help consumers reduce their creditcard debt?

Unfortunately, these trailing commissions cannot be switched off or paid directly to the client’s account by the funds. But there is a way, a very simple and efficient way, which will allow the credit card holder/investor to redirect these commissions into their credit card accounts.

There is a new wave of privately owned companies, operating under their own Australian Financial Services Licence (AFSL), who will retrieve the trailing commissions and redirect them to an account nominated by the investor, such as a credit card account. All the investor has to do is change theAdviser Code on their managed fund, pension / superannuation fund, unit trust, life insurance etc. Some of these companies will charge as little as $240p.a. and rebate 100% of all the trailingcommissions back to the client.

There is one particular private AFSL company that will also allow you to link other people to the nominated account, for example, parents, grandparents, child, spouse, defacto spouse, brother or sister. Your relatives can then help you reduce your debt much quicker because trailing commissions from their investment funds can be aggregated to generate more reward credits for your account.

All investors and consumers who are eligible for such rebates would be wise to go online and research some of these companies. The opportunities are there to make it easier forconsumers to reduce some, if not all, of their credit card debt.

In recent months, the remuneration of senior bank executives including bonuses has become the subject of much criticism, from governments that have bailed various banks on the brink of collapse when the financial crisis reached its apogee a year ago and from the public, from which the bailout funds ultimately come from.

Now, regulators in several countries are looking into banning commissions (also known as entry load fees in the mutual funds industry) for mutual fund distributors in a move to align the interests of the industry and retail clients and as well as to promote best practices.

This comes as part of the reformation of financial services that is happening now in parts of the world with US President Barack Obama laying out his plan for financial re-regulation on June 17.

Investors have seen their investments in such products lose value to the tune of hundreds of billions of dollars as the global economy contracted at a faster pace following last September’s financial meltdown.

There is also widespread distrust of the financial services industry as the world was treated to revelations of fraud involving billions of dollars by Wall Street insiders such as Bernard Madoff and Allen Stanford.

India became the first major country to implement such a ban when the Securities and Exchange Board of India (SEBI) issued guidelines on the banning of entry load fees in mid-June. In a later announcement, the market regulator said this would be implemented from Aug 1.

“The move is to empower investors through transparency in payment of commission and to incentivise long-term investment,” SEBI said in a late June announcement.

Britain’s Financial Services Authority (FSA) has also proposed on June 25 a ban on brokerage commissionsthat will come into effect end of 2012. It is now inviting comments from the industry through the end of October.

It said this was part of provisions to “build people’s trust and confidence in the retail investment market” and is part of the overall plan for re-regulating investing for retail investors.

The Financial Planning Association of Malaysia (FPAM), in an e-mail reply to StarBizWeek, says while its members are not opposed to the idea of doing away with commissions, they believe the market should decide the pace and the way it is to be done.

“In Malaysia, implementing a strict “no commission” structure immediately may cause the untimely demise of the financial planning industry, which currently has less than 300 licensed practitioners” it adds.

Indeed, the London-based Financial Times reported that thousands of independent financial advisers, perhaps up to half of them, will leave the business as a result of the commission ban by the FSA.

The FPAM says the market should be given time to mature while ensuring that it grows towards the “no commission” direction.

“We hope that ultimately, the market will mature in that direction in which consumers, recognising the value of a financial plan, will happily pay the fees for it and financial planners, having been recognised as professionals in their own right, can choose to focus on fee-earning financial plans without having to depend on commissions,” it says.

The FPAM says at this stage, financial planners are largely remunerated in the work through a combination of fees and commissions and that even in mature markets such as the United States, the prevailing model remains that of the fee-plus-commission model.

The association says where best practices are concerned, “consumers may benefit in terms of objectivity of advice arising from the clear cut division in functions between advice (fees) and product selling (commission)”.

However, it says consumers must be prepared to pay for the price of advice if the industry is to be sustainable, as there are also further cost implications arising from the separation of functions.

Critics have long argued that this resulted in a potential conflict of interest for advisers, who might be tempted, or appear to be tempted, into recommending products according to the commission they earn rather than what is suitable for the client.Financial advice is not cheap, but in many cases it’s a must. You are most likely to need to pay for professional financial advice when considering share-based investments such as unit trusts, a pension, mortgage or a protection productAs the saying goes, there is no such thing as a free lunch and there is certainly no such thing as free financial advice.

The vast majority of investment advisers work on a commission rather than fee basis and whilst you do not physically write out a cheque for the advice, you are paying for it out of the investment plans/policies you buy. You may be paying too much.

The argument against commission is that it may cloud an adviser’s decision making and can place far too great an emphasis on selling products rather than giving sound financial planning advice. If a commission-based adviser doesn’t sell you a financial product, he or she will not earn a living. This can lead to conflicts of interest and exploitation by some of the more unscrupulous operators in the financial services industry. There are some excellent commission-only advisers but equally, there are some very poor ones.

Commission and confusion go hand in hand and we would like to take this opportunity to talk you through some of the ways that you might, wittingly or not, be paying commission to an adviser.

Commission rebate services may be perceived as competing with financial advisers, but they can actually help advisers place control over fees back into the hands of clients.

This is according to My Money sales and marketing director Graham Burnard, whose online commission management service enables investors to receivecommissions payable on financial products that are generally paid to financial advisers.

“Good quality practices have not felt threatened by My Money’s services because the clients who are getting their services are happy to pay for it,” Burnard said.

My Money offers two services, one marketed directly to consumers and a wholesale service aimed at financial advisers.

“Our retail service is really aimed at those self-directed investors who are not getting any financial advice from those products,” Burnard said. “It’s very clearly aimed at those who are currently not with a planner or really want control over those funds.”

The My Money wholesale service is aimed at financial adviser practices that are looking to adopt a client-directed payment model, “whereby the client makes the sole determination about payment for the service they are receiving”, Burnard said.

Financial planners can set up a fee account with the client, where they agree on what fee is to be paid progressively through the course of the year. The client can then see what funds are coming into the account from trail and various products, and My Money controls the payment to the planner in accordance with the fees agreed to with the client.

Burnard believes that it is not good enough that planners simply offset commission revenue against the fees they charge.

“That’s not good enough in terms of giving the client ultimate control, for the simple reason being that what happens if the client says they don’t want to pay for services next year – what happens to those trailcommissions that are going to the planner? You end up, like many practices have, with a number of clients on the books where those planners are getting remuneration but there’s no service being provided.”

He added that it is often not cost-effective for them to rebate commissions themselves.

“If the client decides that they don’t want to pay for the advice service moving forward, the planner still needs to collect all this revenue from trail commissions from products that cannot be removed, account for it in an open and transparent way, and then pass that onto the client, and still not receive any remuneration for it. So the reality is that many can’t do it, certainly can’t do it cost-effectively, or cannot provide the level of detailed reporting we do on a monthly basis.”

Entering the property market, no matter how many times you’ve done it, is usually a stressful experience. Not only are you making the biggest financial commitment of your life, you are also locking yourself into a potentially restricted lifestyle for many years to come.

Some people find the experience too overwhelming and opt out of home ownership altogether. The main cause of anxiety relates to money – what else? The two main reasons as to why the home loan you initially signed up with has now become unaffordable is because of rising interest ratesand loss of employment income.

Contrary to what the lenders preach, the home loan market is not that easy to navigate. To many people it seems like they’re just going round in circles. Of course some offer cheaper rates than others but basically the products are all very similar. This is because the underlying philosophy is exactly the same in each of the competing home loan products. They all have trailing commissions built into the interest rates. So regardless of which product you end up with you can’t turn off these trailing commissions. Whether your interest rates are fixed or variable, you still end up paying trailing commissions for the entire duration of the loan.

In plain English, part of the interest which you pay every month on your home loan doesn’t have anything to do with your actual home loan. It goes directly to the broker or institution, whichspent a couple of minutes shuffling papers around before submitting your application to the actual lender. For their small administrative role, they are entitled to receive ongoing monthly payments for the duration of the loan.

The same principal also applies to other financial products such as life insurance, managed funds, margin loans, unit trusts, superannuation and pension funds, to name just a few.

Once you realise what’s been going on all these years you tend to get somewhat frustrated that you have no control over your money in these situations.

The lenders offer commissions as an incentive to their brokers and lending institutions. Lending Institutions are the big banks. It’s hard to imagine that the big banks actually pay themselvescommission for giving you a home loan. But they probably need the incentive too!

Brokers are affiliated with certain lenders and, as a result, will only offer you a limited range of products. (Which are basically all the same only presented differently to look as if they are totally original). In effect, the broker/lending institution is not there to find the best product for you. Their goal is to secure you a loan that maximizes their rewards.

An average home loan of $200,000, for example, at 7% interest will cost the borrower $14,000 p.a. The borrower may not be aware that $700 of this amount goes to the broker/lending institution every year for no other reason than being responsible for submitting the initial loan application form.

Most borrowers would prefer to use this $700 to reduce their interest repayment. By reducing the interest rate the borrower can afford to pay off more of the principal and thereby pay off the home loan years earlier. But, for obvious reasons this is not what the brokers and lending institutions want. They want the borrower to remain in the dark about the underlying commissions in the home loan product and, continue paying out the loan for as long as possible.

Imagine the reaction you would get if you asked your broker or lending institution why they don’t charge a one-off fee for an average run-of-the-mill home loan. Or, if you asked the big lending institution why they don’t offer points and rewards on their credit cards that go towards reducing the home loan interest repayments. They would probably start feeling a bit uncomfortable.

Fortunately, things are beginning to change and the momentum is starting to pick up. Thanks largely to the Internet, people are discovering for themselves that there are other options available. Options that give them the ability to turn off the underlying commissions and take control of their home loan.

By searching the Internet for alternative financial products, borrowers have discovered that there are registered legitimate companies out there that retrieve 100% of the underlying commissions and credit it back to your interest payments.

These companies actually aggregate and convert commissions to reward credits. The reward credits are then used to make payments to your home loan lender, resulting in a reduced interest payment on your home loan.Financial products such as these are very simple and straightforward. You can fill out an application form online and within 4 weeks gain back control of your money.

There are many innovative money saving financial products available on the Internet. But, you have to be prepared to search for them yourself. You will soon realise that this doesn’t apply exclusively to the home loan market. As mentioned previously, it also applies to all other financial products that have underlying commissions. Start asking yourself how much more could you save if you could retrieve thecommissions you are paying on your life insurance, superannuation, managed fund, margin loan, unit trust etc.

It’s your money, it’s your choice, and it should be under your control.