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Planners attack mortgage broker over 'trust' claims

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Australian Broker | 23 Aug 2012, 03:00 AM Agree 0
Financial planners have come out in force to launch a scathing rebuttal of claims from one Victoria-based mortgage broker that they have lost the trust of the Australian public
  • Broke broker | 24 Aug 2012, 01:07 PM Agree 0
    Financial Planners almost never suggest Property as a wealth creation or investment platform, so they rarely refer any one to a broker, after years of handing clients to my Planner partner the only ones to come back are those i have referred when they purchase a new residence. My planner business partner does look after them in so far as providing risk solutions, but as far as being a source of referral business, no.
  • Andrew Hetherington, Intellitrain P/L | 24 Aug 2012, 01:08 PM Agree 0
    Without entering into the debate, I am just wondering why any value would be placed on comments made by those who are not even prepared to put their name to it?
  • Perth Broker | 24 Aug 2012, 01:35 PM Agree 0
    Yep - agree with "Broke broker". Have referred many clients to Financial Planners over the years, who have always promised a reciprocal arrangement, only for it to never happen and ultimately, become a on-way street. FP's talk a great game, but when it come time to roll up the sleeves and get into it, they're all out having 3 and 4 hour lunches, or heading overseas on extneded holidays. I usually find my clients coming back to me saying they're not comfortable with the FP's advice, which is usually to go out and get the biggest Line of Credit you possibly can, so we can load you up with a huge share portfolio. Gee, I wonder how those people are travelling now? Property, or shares? Over the last 5 or 6 years, I think I know which market is travelling the best!
  • Qld Broker | 24 Aug 2012, 02:00 PM Agree 0
    To Perth Broker - Could not agree more.
  • Danny Contatore - It's So Easy Finance | 24 Aug 2012, 02:02 PM Agree 0
    @ Andrew Hetherington - "Without entering into the debate, I am just wondering why any value would be placed on comments made by those who are not even prepared to put their name to it?" - well said!
  • Jim | 24 Aug 2012, 02:52 PM Agree 0
    I rate "financial planners"(wish there is a more appropriate title to describe these people) lower than used-car salesman in the trustworhty ladder. Don't even know why they exist.
  • Peter Wood | 24 Aug 2012, 03:08 PM Agree 0
    Financial Planners are underqualified and over regulated and it creates a culture of inertia. Their mantra of time in the market is obsolete and the ownership of the majority of dealer groups by the Big Banks is dangerous because of lack of competition and cognitive power.
  • Peter | 24 Aug 2012, 03:28 PM Agree 0
    Ohh dear! Comments section full of rubbish written by people who have no clue about what the other side does! I should know, I am both a FP of over 10 yrs standing and a Broker of some 15 yrs. Don't vent your spleen, do research before you speak rubbish! If one must make a comparson, there is poor advice on both sides from time to time. But the lack of in depth qualifications on the Brokers side is worse. I cannot legally justify adn would break every rule in the FP's Code of Practice and ASIC's demands if I supported some of eth negative gearing deals I get put in front of me! Lastly, saying property has outperformed over the last 5 or 6 years may suit someone with a short term horizon, but not someone with say a 20 yr horizon. And guess what outperforms over that length of time? MMmmmm! And where is the capital gain at the moment? Broadly nowhere! Besides who would borrow at 6% for an after tax net of 2 -3% pa? Yet that is what some acctouants recommend in SMSF's, brokers write business that produces that result and financial planners run teh risk of gettign fined and banned if they recommend that! Go figure.
  • Stuart Wemyss | 24 Aug 2012, 03:30 PM Agree 0
    Not sure how anyone can argue that the public don’t trust planners. The industry is circa 30 years old and has a 10-20% market share. Broking is 10 years old (longer in WA) and has 40-45% market share. Obviously planners have been doing something wrong. Broker don’t have to have all the answers (i.e. become accountants, planners, etc.). They just have to have some nouse and their clients best interest at heart and guide their clients to the right professionals at the right times. I believe brokers have earned the right to be the trusted advisor.
  • Peter | 24 Aug 2012, 03:43 PM Agree 0
    Stuart, prior to the early 1990's virtually anyone in Financial Planning as you call it was a Commission Insurance Agent. They haven't existed for many years. FUrthermore they did not provide advice as we know it today, they just sold a product. Most of the products that were sold then haven't been available for new entrants since mid-1990's. PS 142 qualifications came into being late 1990's and the more formal Diploma and Advanced Diploma since early 2000's. Bit difficult to claim that what financial planners do today has been around for 30 odd years.
  • Perth Broker | 24 Aug 2012, 05:23 PM Agree 0
    Peter, a lot of my clients are dealing with a short-term horizon. As you mentioned, most of this topic is relevant to the last 10 or so years, but if you want to look over the last 50 or 60 years to back up your argument, go for it. Anyone can grab a sample that suits their story. My comment was relevant to my clients, most of whom are in their late 40's, early 50's. Also, property has done very nicely in the areas my clients invest and if you're focussing on the Eastern States market, then again, you're spreading your argument a little thin.
  • Peter | 27 Aug 2012, 11:33 AM Agree 0
    Perth Broker,
    Apart from some Cash and some Bonds, tell me which asset class has perfomred in the last 4-5 years? All others are under 3%pa and some like direct property, Aust shares are negative. Mid 2000's direct residential propery had a huge growth spurt, however, do you have any idea what I was getting clients in Aust equities during that time? Even up until as late as Oct/Nov 2008? Probably not! You're grip appears to be about why some of the planners you have expected referrals to be given what you want and/or referrals received hasn;t worked the way you wanted. Have you ever gone back and genuinely asked these Planners why? Could the problem be you, not them. I don't know.
  • Perth Broker | 27 Aug 2012, 12:46 PM Agree 0
    Peter, have you heard of the Pilbarra and the mineral resources boom? Port Hedland, Karratha, Newman, Darwin, Kununurra, Broome - any of these ring a bell? I have clients who purchased in 2004-05-06 in these areas, who have got 100% growth of the past 6 to 8 years, which probably isn't too bad a result. I also don't charge my clients anything for my assistance and I'm not biased. I have also suggested to my clients that they need to diversify their investments, with shares being a good option to balance thier portfolio. However, every FP I have ever dealt with is only after one thing - as much as they can grab. To get hold of a few clients, they will sell thier mother and promise you the world. However, being short-sighted like most of them are, they fail to recognise the value of playing nicely with other people and once they've burnt one or two clients, thus harming my relationship with the client, you never hear from them again!

    So, like you say Peter, it's probably me!!!

  • Nedi | 27 Aug 2012, 02:38 PM Agree 0
    Do people actually believe, that simply having the right cerrtifcate means you are a good financial planner who can create wealth for their clients?
    How many of you actually know of anyone "properly" wealthy, who credits there financial planner for it.
    Now think about how many you know who declare they got their loan, "thanks" to their broker.
    Brokers only get paid for what they purport to sell, only once they acheive an outcome.
    Fiancial planners should not be compared to brokers, the two occupations are not similar at all, planners are more like solicitors, they get paid regardless of whether they acheive a successful outcome or not.....therefore they are VERY VERY different to brokers.
  • Peter | 28 Aug 2012, 12:27 PM Agree 0
    Good grief Perth Broker, you pull out a mining resource boom to prove a point! Let's examine that further, have you ever heard of city suburbs? I assume you have! You know the ones where the average home has driopped in value in the last few years? You know, valuation 2006 - $520k; valuation 2012 $450k! I assume the reason you do nto charge yoru client's for your assistance is because you get paid via commissions! If your experience with FP's is exactly as you say, I would suggest you are mixing in the wrong company. So, yes, it may very well be you as there are plenty of FP's I know who work quite successfully with Brokers, accountants, solicitors etc.
    Nedi, I have written testamonials from clients who will tell that, together we have done is create wealth for them. Not sure what you mean by "properly" wealthy ... as opposed to what ..."improperly" wealthy? There are many factors that contribute to how wealthy a person becomes. Not the least, how much they earn, how much they spend, their financial structure, are they married, single or do they have kids etc etc all way before one considers investment! How about Estate Planning, Risk Minimisation, Business structuring, Tax Planning, Budgeting, Superannuation structures, SMSF's, and so on? Provided the advice is good and it is followed, every outcome is achieved. Again, nothing I;ve mentioned in that list will necessarily produce wealth, but they are all important. It seems you, like a lot of people, do not understand that very, very few planners control or do the investment for their clients. Certainly, no-one, least of all planners are responsible for the investment returns. Are you responsible for the after tax returns of an investment property just because you recomomended a loan? Of course not!
  • Perth Broker | 28 Aug 2012, 05:17 PM Agree 0

    That is the area I've been dealing in - did you miss it all together? That's a pity for you and your clients.

    You started off with the following comment, suggesting you are the living, breathing authority on all things fiscal.
    "Comments section full of rubbish written by people who have no clue about what the other side does!"

    My point is that you are being very patronising and condescending and I hope you don't talk down to your clients in this manner - although I suspect you probably do!

    I stated that I try and get my clients to diversify and I have recommended they do get shares and use FP's. My experience however has been very disheartening, which is supported by my clients own accounts of dealing with these same FP's. Maybe you're right - wrong crowd or something, or maybe they're just all a**holes in Perth!

    The good thing that comes out of your comments is the support it lends to all these gut feelings, as you fail to concede anything that may be the slightest bit in favour of my own views, purely to remonstrate with me and assert that you know a whole lot more than everyone else. Which is as I and my clients say / have found, typical of FP's and at the heart of the whoel problem, as proposed in the headline article - ie. FP's have lost the trust of there clients!

    Good day to you, Sir!
  • Scott Middleton | 11 Aug 2017, 12:51 AM Agree 0
    I think Brokers have earned the right to work collaboratively within a network of advisers being Accountants, Lawyers, Bankers and Financial Planners. As a FP with 27 years of experience, I believe the best client outcomes are achieved when the ego of the primary relationship manager is removed, and outcomes are sourced from the individual best suited to providing the solution. I have complete respect and trust in the Brokers I refer to and I would like to think they feel the same way about me. Stuart, I am worried you are on the wrong path and are in danger of pushing an agenda that is not focussed on client outcomes, but simply an ego thing ! Come back to me when you have something valid to contribute.

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