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News Bulletin : ADA News Bulletin September 2011
26 SePtember 2011 Compiled by Michael Lannon investment insight WHOm TO TRUST for quality investment information www.2020directinvest.com.au/ada | 1800 352 021 100% entry fee rebate on managed funds “nO OnE CARES MORE AbOUT YOUR MOnEY THAn YOU” After 24 years in this industry it continues to astound me that people spend significantly more time figuring out which fridge to buy than they do looking after their investments. It might have something to do the low level of trust that Australians apparently have in the financial services industry. In this month’s article, I will discuss the concept of trust, highlight how to spot conflicts of interest and bias and direct you to some excellent resources that can help you to become a better investor. WHOM dO YOU TRUST WITH YOUR fInAnCIAL fUTURE? A recently published study of Australia’s most trusted professions revealed that the top 10 professions are as follows: 1. Paramedics 2. Firefighters 3. Pilots 4. Rescue volunteers 5. Nurses 6. Pharmacists 7. Farmers 8. Medical specialists 9. GPs 10. Veterinarians For my ADA readers, dentists were ranked 16th. What I found interesting was financial planners at 32nd ranked just ahead of lawyers (33) and bankers (34) and not far behind were Australia’s least trusted people – car salesman (43); politicians (44); and telemarketers (45). Huge investor losses from Storm Financial and Westpoint coupled with concerns about the lack of independent ownership have made Australian investors wary of the entire financial services industry. If you can’t trust financial advisers, whose profession is to manage your money, who can you trust? I always advocate that investors should take a greater role in their finance and investment strategies carefully watching fees and charges as many of these fees are unnecessary. Now the Federal government is introducing reforms designed to address these issues and put more control in the hands of investors. I applaud these initiatives as long as advisers are paid to sell their employers’ products the potential for biased advice will always exist. I believe the best strategy for investors is to put more time and effort into actively participating in investment decisions. The first step for investors in developing trust in financial advisers and financial products is to ensure their interests are aligned with those of their adviser. In my opinion, your adviser’s key role should be assisting in developing the appropriate investment
ADA News Bulletin August 2011
ADA News Bulletin October 2011