In a statement welcoming the launch of a joint financial advice offering from Shartru and Resi Mortgage Corporation, Dr Hewson said the rise of the SMSF sector was making professional financial advice more important.
“With around 75 per cent of self-managed superfund trustees not using a financial adviser to help with their investment strategy we believe there is a looming crisis in Australia,” he said.
“Many are not adequately insured and may be retiring without a properly diversified investment portfolio,” he added.
The joint venture, reported by ifa sister title InvestorDaily today, will help bridge the advice gap for direct property investors, Dr Hewson said.
“We know many of these Australians are favourable to property investing, so we will be building on this to give clients a more balanced asset allocation and portfolio,” he said.
“We believe the match of the expertise of both our groups will be of significant benefit to our existing and prospective clients.”
The new venture – Resi Financial Services – will see Shartru-affiliated and qualified financial planners working alongside Resi’s existing mortgage specialists in retail franchises.
The project has been trialled iin the Sutherland franchise in suburban Sydney since February and will be rolled out progressively across the country over the next 12 months.
Dave, we need more like you!
CAF – You raise some good points.
To try and differentiate myself I have (in addition to CFP) obtained the SPAA qualification (SMSF Specialist Adviser) and also have become a qualified Real Estate Agent to illustrate I dont just flog managed funds. I would also like to complete some form of shares certification but one doesnt really exist.
However, I know that qualifications are not always that tough to get and do not necessarily confirm experience nor expertise.
I try and illustrate my experience (and tennure) and areas of expertise on my profile on the consumer ‘search for adviser’ websites through the FPA and SPAA but this still doesnt reach many people and many people who need advice may not turn to these sites. In well over 10 years in the industry I think I have had maybe 1 or 2 clients find me via these means.
I am not sure what the answer is at present other than for consumers to meet several planners and ask them all a heap of questions.
Dave – thanks for your thoughts.
In my experience most SMSF trustees / members don’t have a circle of other SMSF dudes to speak to let alone recommend a planner.
Food for thought, how can the planning industry have some form of certification (ouch) that A)Shows the experience in dealing with SMSF and B) length and continuity of service.
I know this idea will grate with many, as MORE ‘regulation’ but we have to somehow raise the awareness of the experience.
The problem with labels is that many are classified as ‘senior planners’ but these labels are often not worth the business card upon which they are printed.
I have met a fair few and it appears that this designation is often given for more than 12 months with some groups, or even less 🙂
We know where we need to go but how to get there?
CAF –
Point B.
It would be, I have seen many planners come and go over the years and more importantly, many who are too busy running their own business or trying to hit targets or trying to manage client bases that are too big to be able to deliver the high quality and complex advice and high-touch service requried for many SMSF’s.
I am not sure how to find a high quality planner who can give specialised investment (and unbiased) advice on direct investments who will be around for a long time. That’s me in a nutshell and I’m sure there are plenty of others the same out there, but I suppose it could be hard for SMSF’s to identify them or seek them out because like me, they probably dont advertise and generate most new business from leads from happy existing clients. In fact, thats how, DIY fund members should ask other DIY fund members for referrals to decent planners and meet a few and see how it goes.
CAF –
Agree with point A.
I work for a big 4 bank in the business banking side of the business (as a senior planner) and I give advice on direct investments (shares, hybrids, property, etc – pure fee for service – flat dollar) and this is sort of my niche in our local area. I know that most retail planners (inc. in our branches) dont have the expertise or authority to do this. But our bank provides the ability for clients to be on-referred to me to meet this need. I know many other big banks don’t have planners like me in their business. But many IFA’s offer the advice I do, so it is available but this is probably unknown to prospective DIY fund members. I am not having a go at the ‘branch planners’, just suggesting the advice is out there, but most consumers are not aware and most retail planners (i.e. in banks or IFA’s) have little to gain by referring a prospective client to someone else, even where suitable.
Dave – your comment ‘I agree that SMSF trustees thinking they can DIY & do better is silly. Why an average trustee thinks they can do better than a qualified, experienced professional adviser/investo r is beyond me. ‘
A)
Maybe many SMSF are invested primarily in actual stocks and not managed funds. So many planners try and push managed funds, as the analysis on specific stocks is somewhat more difficult for the average planner?
B)
It would be interesting to see the numbers for planners that qualify each year and what % stay registered 5 years later. There appear to be lots of newbies every year, and I’m sure many just fall away. And lots more jump from one business to the next. How do SMSF trustees find an experienced planner who will deal with individual stocks?, and is there for the long term?
MICHAEL, I agree. Property in SMSF’s is being heavily promoted at present by ‘sales’ organisations to tap into the market of those who are not pleased with share market returns.
It’s not as simple as the spruikers or many would be DIY fund trustees would think.
Consideration needs to still be given to things like, what deposit to use, level or gearing (LVR), cash flow, positive/negative gearing, liquidity, cash flow now and in future, diversification, etc, etc. Not too mention actually choosing the right type of property to target the right tax deductions, growth, income, etc to match their goals.
Too many SMSF’s are just being set up to buy any old property with little consideration being given to the above things and it might seem great now, but it could look different in hindsight if not part of a well thought out master plan. Sadly, people think property just goes up and up so the details are irrelevant. How wrong that is…
As a resident of the Sutherland Shire I can testify to a sudden love affair with residential property investment in SMSF. Problem is that many are unaware that negative gearing or gearing into one rental property is a recipe for disaster with a super fund.
Strategies to include property are one thing, but currently there is a preponderance of mum & dad SMSF having one geared asset as the dominant or only asset.
I agree that SMSF trustees thinking they can DIY & do better is silly. Why an average trustee thinks they can do better than a qualified, experienced professional adviser/investor is beyond me.
Having said that, I also agree that sadly, too many planners, primarily those in the retail space for the larger organisations (ie branch based bank planners) are not good enough to advise the more involved needs/wants of SMSF investors.
Sadly, this is why many people set up a SMSF & go it alone, because their experience with advice has not been great.
If those people had have or could be exposed to an adequatley skilled adviser who can provide a higher level of advice and service (ie direct shares & other listed investments like hybrids and also advise on things like property – i.e. true fee for sservice, not % based on $ in managed funds) then they may either have not gone down the SMSF path or in doing so, seek initial and ongoing advice from a quality fp.
It seems that the missing point here has been in the poor performance of financial planners in advice in the past to trustees and individual has been one of the major reasons people are taking control of their own superannuation investments.
‘he resistance of SMSF trustees towards professional advice could lead the sector to crisis point.’
Well, he would, wouldn’t he.
Scaremongering headline based on a vested interest.