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News Bulletin : ADA News Bulletin September 2011
29 SePtember 2011 investment insight strategy and not in trying to sell you a product. However, with over 80% of financial advisers owned or controlled by the product manufacturers (banks and insurance companies) this is not always the case. For example, if you go to AMP or Westpac for financial planning chances are you will be sold an AMP or Westpac branded product. This doesn’t necessarily mean you’re getting bad advice. However, later in the article I will outline how to ensure you are getting the best advice. GETTInG STARTEd Two free online resources I rate very highly are ASIC’s MoneySmart website www.moneysmart.com.au and the Investor Education Centre website www.2020directinvest.com.au . MoneySmart, developed by ASIC, has a wide range of information on everything from credit cards and mortgages to investment and superannuation. Presented in a clear and concise manner investors are given useful tools and educational resources to start you on the road to becoming a better informed investor. Investor Education, created by 2020, offers more in-depth investment related information; everything from covering basic investment concepts to providing access to detailed strategies and monthly investment news. GETTInG bETTER AdvICE – IdEnTIfYInG COnfLICTS Of InTEREST To avoid being a victim of conflicts of interest find an adviser who works for you and is paid only by you on your terms; preferably on a dollar based hourly fee for service basis. This will ensure an alignment of your interests and ensure that you only pay for the advice needed. Don’t be afraid to ask your adviser pointed questions about why a particular product or brand is recommended. Is the recommended product the best for your circumstances and why? Is there an ownership link between the adviser and product manufacturer that may bias the recommendation? Listen carefully to the answers you receive and take your time in deciding on the best course of action. If you feel unduly pressured to make a decision maybe it is time to seek another adviser as this is the tactic of a salesman and not the action of a true professional. The Australian Securities and Investment Commission (ASIC) is working with the government to educate Australians about financial advice as part of the National Financial Literacy strategy. ASIC has produced an excellent guide called Getting Advice* which is a free practical guide designed to assist you in understanding when and if you need advice. It also explains in practical terms how to work with an adviser to get advice that suits your needs. It is recommend you read this publication and use it as a starting point for evaluating any new or current advice proposition. EdUCATIOn IS THE KEY TO SUCCESS Managing your wealth is an ongoing process. You need to stay informed with timely and relevant information in order to understand and assess your investment portfolio on a regular basis. It’s a service that is not provided by many financial advisers and whether you use an adviser or not it is an important key to successful investing. Today, advances in technology have allowed time poor investors to access information on their own terms and at times to suit their busy lifestyles. Much of the proprietary research information, previously only available via financial advisers, is now available directly to investors either freely or via subscription services. This is an excerpt of Michael’s article, to read the article in full please visit www.2020directinvest.com.au/ada *Available via Investor Education of 2020’s website or simply Google the title. The information contained in this article is believed to be accurate. To the maximum extent permitted by the law, 2020 DIRECTINVEST (AFSL 244 249) disclaims liability for errors in, or omissions from, this article. In no way should this article be construed as providing securities advice or an endorsement or recommendation of any security or product. In preparing this article we have not taken into consideration your investment objectives or your investment needs and make no representation as to the suitability or otherwise of any product, or security, to you. Michael Lannon is the Executive Director of 2020 DIRECTINVEST, an ADA Partner service specialising in the provision of execution only DIY investment services. For more information or any questions please contact Michael Lannon on 1800 352 021 or visit 2020’s website on www.2020DIRECTINVEST.com.au “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.”
ADA News Bulletin August 2011
ADA News Bulletin October 2011