Stockspot founder Chris Brycki said consumers will be able to compare 94 ASX-listed ETFs via its online pinwheel tool, which will provide them information on ETFs based on fees, distribution yield and bid/ask spread without having to pay for an adviser to do it for them.
“One of the reasons advisers and fund managers have been able to get away with charging huge fees to clients is the fact that the finance industry has been a black box, indecipherable to the average investor,” Mr Brycki said.
“Information asymmetry between the financial services industry and investors creates a moral hazard that has been rich pickings for unscrupulous financial advisors who have for too long been enriching themselves at the expense of consumers,” he said.
Mr Brycki said a study of managed funds by Stockspot found fees at about 45 per cent of returns from managed funds on bank-owned platforms over the five years to 2013.
“Many fund managers who charge these high fees have been shown to be hugging the index like passive investment funds – so they’re charging active management fees but adding precious little value,” Mr Brycki said.
“As consumers become more informed and ETF index funds become more prominent, these index hugging active managers face being squeezed out of the market,” Mr Brycki said.
Tim666 & Steve, the FP knockers – good on you boys for trying to come up with new comedy material. ‘A’ for effort but definitely a FAIL for knowing the subject matter and content in discussion.
Did give me my Friday smirk again though, so thanks, once again your attempts at intelligent debate are analogous to a cognitive wasteland…
(And Steve wtf are you on about the $30k fee? Clearly you are insane and know nothing about who we are or what we charge – again further proof to my comments above, you are hilarious in your self embarrassment!)
Exactly Gerry, this industry has been hijacked & the poor consumer/client SHOULD NOT HAVE TO PAY FOR THE EXCESS COST as a result of it I know exactly who is to blame, I’ve blamed them here many many times, our industry body, busy busy busy with self preservation & kissing everyone’s behind EXCEPT the advisers that pay their bills. And it’s all hijacked in the name of quality for the client, what absolute rubbish! This industry is worse off because of them & their course flogging, 30 page soa tactics. Ridiculous.
Most of the copy has been generated from a couple sooks who cant understand the value of advice and the role a trusted adviser has and what it’s worth to some. We are 80% an accounting practice and while most clients could in one way or another battle through compliance and management they continue to delegate to us. Cloud accounting and other enhancements have only helped. FP is no different. I gave up doing my own dentistry long ago not because I can’t I just chose not to for convenience.
WOW!! I read these articles daily and can’t recall a single article generating so many responses – most angry or cynical in tone! I think the discussion has missed a critical point. There will always be clients who seek comprehensive advice but on-line portfolio management will meet the needs of some of the 80% who can’t/ won’t/ don’t see the value in full advice and simply want some help with managing their investable dollars. Probably in the age demomgraphic of 30-50 years old. They are still free to seek advice at critical points in their life on their own terms, and probably will. Advisers who engage with their clients and can clearly demonstrate value have nothing to worry about.
You know what. I’m an adviser but I think if I wasn’t I’d probably just go to my accountant and get them to do a basic TTR spreadsheet (which they all have)and pay the $200 or whatever for an hours chat. That’s how level the playing field is…whereas advisers have to do a 30 page CDF, prepare some huge SOA and regurgitate fee disclosures and conflicts and explain how the advice is in the best’s interest blah blah, but accountant just does a spreadsheet. I wish we could do the same one day, it’s how advice should be…but it got hijacked by our product overlords.
Spot on Tim. You have hit a raw nerve here (guess who is ripping off their uneducated client base with templated SIMPLE ttr strategies). Don’t worry, it wasn’t that long ago the old tweed jacket brigade thought their 125% commissions plus volume overrides plus trips plus handouts wouldn’t end either. JOE, you are clearly proud of overcharging your clients for simple strategies. Hopefully you finish preying on the uneducated soon.
Steve….the right price is the point just before a client says no….Price is not determined by what sounds like a couple wannabe advisers who haven’t worked out how to articulate or understand value or heaven forbid employees of the subject in the article. . A new wiz bang method of product delivery is no threat to an advice practice. Why is it that we are busier than we have ever been and charging more than we ever have. Your posts have more than a hint of sour grapes that only you share your view and maybe perhaps your alias Tim.
How much do you charge to setup an SMSF LRBA for property strategy? $30,000?
Ha ha! Wow Tim, you wouldn’t be Steve under a different alias would you 🙂 If not you guys should team up, like other comedy greats like ‘The Two Ronnies’ or ‘Statler & Waldorf’ in the muppets…. No, hold on, those guys were actually clever.
Perhaps more like ‘Laurel & Hardy’, or ‘Ren & Stimpy’…. actually even more perfect; ‘Beavis & Butthead’ 🙂
Come on, you guys can do better than just that same old diatribe, got any new material floating around in that intellectual void?
Hard to verbally joust when your opponent is so evidently unarmed.
Timm666 you are right.
I will charge them $5,000.00 in 2 years time to fix up there mistakes when they realise that they have spent most of their retirement $$$ 5 years out.
I am also positive that they also fully understand that these strategies need to be reset annually.
Guys, your days of charging $3,000 SOAs for a TTR strategy, some risk and a gearing plan are numbered. There are only a few strategies left in your armoury and people can learn these strategies online for free and do it themselves.
Thanks Steve – needed the Friday Smirk at your expense, the comedy keeps on rolling…
If ever you believed in reincarnation I am guessing court jester appeared in your background judging by how you either intentionally or inadvertently amuse. Would loooove to hear your Xmas party repertoire especially after a drink or two, sure the gems would just flow 🙂
We had to wait till Monday to get our laugh. His mum obviously didn’t allow computer access over the weekend to young Stevie.
Joe, take a pill, chill. I’m sure you have another few years yet before your clients figure out most of them don’t need to pay your fees each year for the simple strategies.
The 80 year old agri client you mention falls under the 10% of clients who need you. No argument from me on that Joe?? Very touchy bunch you lot are. Lol. Again truth hurts.
Wow, so everything in FP is all about investment research? What a chump. And if it comes to that, then why even bother with this silly little website he’s designed? Using his own logic, avoid his ‘unscrupulous’ fees and simply research all 94 ETF’s themselves, after all clearly it couldn’t be hard if a person of this level of intelligence can do it.
Steve – a bit of knowledge is dangerous, and there is nothing so dangerous as an imbecile who thinks they are smart. Via your comments, guess where that puts you…?
‘Simple’ strategies? Laughable. So, Einstein, how does the web help an 80 year old multimillionaire agricultural producer correctly plan out the taxation & estate planning aspect of the numerous entities across a diverse extended family, while taking into account asset protection over multiple generations? Or how best structure the affairs of a client suffering a debilitating stroke so that they can legally maximise Centrelink, protect life savings & retain dignity through the challenges of rehabilitation?
Clearly have no knowledge or right to be mixing in this company. Pre-school is appropriate for all the sense your ill informed comments have made. The humour in this is you’re not even aware how much youre embarrassing yourself. Write more, I need a good Fri laugh.
Steve…..me thinks thou dost protest too much…
Everything is simple once you know how.
Truth hurts & you all know how simple 90% of your “strategies” are. Sure their might be a complex case warranting your fees, but you and I know 90% of what you do is simple & easy. Sure takes a mountain of paper work, hours & cost but none of this will concern your future clients. They will not pay. The simple “strategies” will be well documented & easy to replicate without you. Get real, be honest with yourselves, drop the buzz words & pray this 40 page SOA nonsense is eliminated one day.
This guy makes a statement based on ignorance, which clearly displays his impressive lack of knowledge similar to that saying about empty vessels making the most noise.
Investment is only but one of the end pieces, (and a lot of real client work doesn’t even involve making investment recommendations).
Clearly another disciple of the ISA gospel of disparaging advisers to attempt to line their own pockets… Or is his online service free of charges? I mean after all, once he has cumulatively recovered the cost price of the research on offer, surely following his own logic, anything above that would be unscrupulous as he hasn’t done anything further?
Of course AJakka…my observation is broad. 10 to 20 years time if we still do things the way we do, which is what we’ve done for the last 20 years, will the industry survive as we know it? I say no. There will be pockets of advisers looking after high net worth, the rest will working in the banks, Ray White and Mortgage Choice etc because they will have the scale to provide subsidised lower cost advice. Independent advice making a comeback…nope…I can’t see it. Not the way things work currently.
Gerry….simple..pick a better clientele who need and will pay for advice. No one is forced to do work for anyone that I’m aware of.
Wildcat…yes I’m sure a busy young professional on a high income might be happy to pay, but what abut the rest? I took on a young couple recently in their early 20s. The work involved in just increasing his life cover in employer super (not a fund I manage by the way)and roll over a couple of small funds was huge…mainly because I had to do a 60 page SOA with two alternatives on every freakin replacement policy. Don’t get risk commissions on that or ongoing service fee and couldn’t charge the fund for the advice. I can tell you…if I charged an hourly rate for that workload they would have scared way. This regulatory crap must change and we will be priced out of the market. Ray White anyone? That could well be the future of advice right there if we don’t smarten up.
Gerry depends on your business model and chosen market. There are many markets and modes of accessing them.
Your points are correct for that demographic as a general rule. Busy young professionals with little time will still pay full service fees.
[quote name=”Steve”] “Strategy”can clearly be researched and implemented without your “expensive” fees for the astute modern investor or couple.
Dear Steve,
With the right knowledge and time some people could do it themselves. However the same could be said for medicine, law, accounting, psychology etc. Our clients are not old, we are not old, and our clients get BETTER results after paying reasonable fees for the strategies, coaching, and guidance we provide. Welcome to 2014, pretty sure you are in 1984 or dementia – not sure which.
I actually agree with a fair bit Steve says. Ageing client bases most of us have. How will we attract the younger generation coming through when we still have to do a 50 page SOA to recommend they consolidate a few small super funds and add some life cover…and start a small monthly savings plan. That’ll be $1500 thanks…umm i’ll just think about it first (sound of feet scurrying away).
Most the younger ones will just want help with budgeting, cashflow, home loans etc. They’ll pay for help, but not a big SOA and the BS that goes with it. The fact that we can’t charge a one-off to their employer super funds for a bit of advice …well, that’s a killer in alot of cases.
Spot on Wildcat…Something has upset Steve obviously. Good strategic advise and great personally delivered service is a highly sought after thing and will never go out of style. This is distinct from products and their modes of delivery which change like the weather. I have the same issue, too much to do and not enough time in the day. Must be lucky also but then we spend our days on strategy and looking after real people rather than product selection and fashions of its delivery.
You are right Steve, there is always only one business model that can ever succeed and the church of investment dogma peddled by the ISA means ‘cost is more important than value’ wins every time.
Of course our biggest business issue right now is too much new business.
Must be luck I suppose?
Cliches and buzz words wear thin. Old dinosaurs resting their hats on good ole fashioned service and calling “strategy’ is everything must realise that “strategy” is not unique to you or your practice. Get real, seriously, how hard is it in most cases!! “Strategy”can clearly be researched and implemented without your “expensive” fees for the astute modern investor or couple. Its a blow to your ego but the truth hurts im afraid. One day you aging client base that doesnt question your high fees will be gone and you will go too. Better get with it boys n girls, your in 2014!
Strategic advice will outperform investment advice on almost every client situation.
People who think “razor sharp fees” are the only game in town can go compete against the insto’s and ISA in their race to the bottom.
Melinda you are 100% correct in your comments. ETF’s, managed funds whatever are just tools to implement a strategy, there is no best “tool” out there.
For a wood screw you use a screw driver, for a nail a screw driver is not much use.
Investment tools are absolutely no different.
Advisers better get with it or get out basically.
Buzz words like fee for service, strategic & the other hatful of industry words are going to wear thin in years to come. You better create more of a proposition to your clients than just a business model that produces you revenue & the client the same old service with average market returns. In the future you will need to be razor sharp on fees & almost crystal ball like strategy or you will be dropped & replaced. The smile & birthday card won’t cut it anymore. NOW, if only we had an industry body that was interested in making our business easier to work on rather than making us buy courses & study.
Dear Mr Brycki,
Wake up, there is a new world of financial advice, that is strategic in nature and not product pushing. Anyone who has let this 10 year old rising trend pass them by is not only uneducated but also ignorant.
“Stockspot is your online financial adviser.”
Don’t you mean, online investment adviser Chris. Your online solution doesn’t provide advice on anything but investments; there’s more to financial planning than just investing, you know that right.
I’m with you Chris, there are lazy buggers out there that have been pretending to be financial advisers, yet have been doing nothing more than giving substandard investment advice when better options exist.
But aren’t you doing the same to some degree? Pretending to be a financial adviser – but all you’re doing is providing investment advice.
Good concept, re-think the execution and positioning as a financial adviser…
Mr Brycki,
On the face of it, you seem to be offering quite a useful service. Why do you feel it is necessary to bag all financial planners as “unscrupulous advisers” to get publicity? All it does is bring you down personally and by association, your product. How will the public ever gain the confidence to talk to properly qualified, ethical financial planners who act in their client’s best interest, when participants such as yourself slag off at all other financial planners and try to tar our emerging profession with such description as ‘unscrupulous financial advisors who have been enriching themselves at the expense of consumers’? Shame.
The incorrect assumption above is that all consumers know what they are doing. The self directed investor has always been free to do as they wish. A lot of people still need advice. This is not a revolutionary development despite the the claims. Just another spruiker in a long conga line of product pushers.
Hopefully the AFSL Mr Brycki works under is not prone to any ‘unscrupulous behaviour’ as he puts it. I don’t think throwing bricks at the industry he works in aids the profession he claims to represent? rather than criticize others to promote his solution it would be wiser to accept that portfolios often adopt a combination of passive and active styles which means ETF’s and alpha generating work in tandem. His solution which is one dimensional is limited – Bonds for example!