Australia is not a stranger when it comes to financial planning scandal. In fact, many are saying that if the trend continues in the next few years, people will think that politicians are more reliable than financial planners. There are many financial advice websites found online but not all of them can be trusted. This is why people are calling for laws that will ensure these portals are subjected to regulation along with individual financial advisers.
The problem is that the government authorities who should be imposing stricter laws are going to the opposite side by setting the bar quite low. This is why many financial planners are able to get away from various such as the one concerning Commonwealth Bank. There are also questions regarding the advice given out by the staff of Macquarie Group. Below are tips in order for you to avoid being a victim of bad financial advice:
- Make sure how your financial advisor will charge you. It can either be based on an hourly rate or it can also be a fixed rate. There are some that will charge a certain percentage depending on your assets. For hourly rates, it should only start once you have agreed with the contract. If the advisor is demanding a percentage from your assets, it should be a red flag for you because this is an unfair method of charging especially when you have a lot of assets under your name.
- Ask your financial advisor whether he or she is working for a company associated with a bank or under wealth managers. Either of the two should be a red flag because you can be sure that the products the advisor is selling is most probably recommended with a bias.
- Don’t forget to ask for proof regarding the track record of your financial advisor. It is your basic right as the client since your money is going to be utilized as investment.
- Make sure to check financial advice websites whenever your advisor suggests a new investment scheme. It is to ensure that you understand what you are getting into.