The Future of Financial Advice

Amongst talk of carbon taxes and MRRT's, there is some legislative discussion going on at the mmoment in Canberra looking at the future of financial advice (FoFA). In short, the bill is designed to improve acccess to financial advice. It covers quite a few areas including commissions on investment products, and opting - in to ongoing fees among other areas.

The FPA, while broadly supporting the initiatives, wants to delay implementation (which now seems to be happening), and has some concerns with some other areas. THE CEO of the FPA,  has been quoted today saying it was important that the legislation achieved the following benefits:

Consumer benefits

- To help consumers know how to find a financial planner who is appropriately qualified, educated and works to high professional standards, and clearly separate these professionals from others who give advice
 - To help consumers to easily understand what advice they’re getting, who they’re getting it from, how much they pay and how they will pay

Profession benefits

 - To make sure the professional standards of financial planners are increased over the coming years
 - To make sure that all who give advice put their clients’ interests first

I couldn't agree more.

In the midst of this talk for reform, maybe now is the time to talk about some other industry standards. It is my belief, and soon I will out it to a test, that the majority, no the vast majority, have no idea what happens to their money once it is put in the bank, sent to their super funds, or invested.

Having an ethical policy, or CSR page is good, but what is important in tranparency. Under the guise of commercial in confidence, there are a number of fund managers that will not reveal where they invest their funds. Errr, your funds.

How do you feel about mining? How about uranium mining? What about tobacco, or labour standards, or the use of child labourers by foreign multinationals? Regardless of what your personally held values might be, you should be able to invest in line with, free from the myth that your returns will be negatively effected by your decisions.

The vast majority of people fail to meet their retirement goals without advice. Clearly, returns are important, particularly in light of events over the last few years. However, even keeping this in mind, peoples priorities are changing. People are recycling, composting, growing their own vegies, and keeping some chooks in the back yard. On top of that, people are starting to become aware that there are industries that they don't want to support, and some that they do.

It is one of our guiding principles that we take peoples values into consideration. It would be nice to think that this might be the norm in the future, rather than the exception.

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Happy New Eco-year!!

Happy New Year everyone.

This year, we really saw in the New Year in style.

For us, the holiday period is really about spending time with family and friends, and we got the opportunity to spend 3 days at the eco retreat that is owned by some friends of ours. What's more, we got to enjoy their company, and that of another family of lovely people.

The retreat is only a 2 hour drive from Brisbane, and available for letting. There are mountains, walking tracks, swimming holes, clean air and fantastic views of the surrounds, and, on a clear night, the stars and planets.

The house (above) is situated on land overlooking a gorge. It has solar power, a composting toilet, and a great story on how it got to be where it is now.

Relaxing in the falls, and exploring the area was a great way to start the year and focus on the things that were really important.

In planning your finances, I believe that there are some basic fundamentals that don't change whether we are in the midst of a boom, or when times aren't so good. They are:

1. Spend less than you earn, and do something smart with the difference;
2. Use debt, but use it wisely, and to a level that is comfortable (and even conservative);
3. Ensure you are protected against the things that you can't control.

Being able to spend some time away from distractions with the people most important to me allows me to remember the reasons why I am doing what I am doing with our business, and ensures we keep our eyes on those fundamentals for our family, and for our clients.

Finding the balance between working and lifestyle can be tough, but a few days spent with family and friends in the fresh air has helped us to remember why we are doing all of this, and what is important to us.

Steve

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