{"id":2651,"date":"2017-11-08T22:51:10","date_gmt":"2017-11-08T22:51:10","guid":{"rendered":"https:\/\/www.prosolution.com.au\/?p=2651"},"modified":"2018-03-08T17:17:13","modified_gmt":"2018-03-08T07:17:13","slug":"price-financial-advice-versus-cost","status":"publish","type":"post","link":"https:\/\/wealthcoach.com.au\/stage\/price-financial-advice-versus-cost\/","title":{"rendered":"The price of financial advice versus its cost. One is critical and one is not."},"content":{"rendered":"

\"Financial<\/a><\/p>\n

Quality professional advice almost always pays for itself. That is, a good lawyer will help you reduce risk or save money. An astute accountant will help you minimise the tax you pay. A reputable financial planner will make your money work very hard for you. Assuming the professional advice is of a high standard, the value<\/em> received should always be more than the price<\/em> paid.<\/p>\n

However, when it comes to financial advice, I\u2019d like to suggest that many people confuse the price<\/em> of financial advice with its cost. <\/em>In most situations, cost<\/em> is a lot more significant than the price (fee)<\/em>. Let me explain.<\/p>\n

You should always be better off, net of fees<\/h3>\n

Have a think about what your net worth might be in 10 or 20 years if you go it alone (i.e. no financial advisor) \u2013 allowing for a few mistakes and delays along the way. Then consider the impact on your net worth if you eliminate the mistakes, time delays, earn a better return less any fees that you pay. If people honestly compare those two figures it will be obvious that you are better off to receive quality financial advice, net of fees. Therefore, over time, the price of quality financial advice will be nil as the benefits gained more than outweigh the cost.<\/p>\n

But hang on, how do you know a financial planner won\u2019t make mistakes? How do you know a financial planner will generate higher returns? Well that\u2019s all about the cost<\/em> of advice.<\/p>\n

The cost of financial advice<\/h3>\n

Seth Godin has eloquently said<\/a>, \u201cCost is more relevant, more real and more complicated.\u201d<\/p>\n

The cost of financial advice is reflected in missed returns, time wasted, money lost, stress, lost sleep, frustration, happiness and so on. The difference between (1) good financial advice, (2) no financial advice and (3) poor financial advice can be dramatic. In fact, life changing.<\/p>\n

I believe that there are three things you can do to reduce the cost of financial advice. Here they are in order of importance:<\/p>\n

    \n
  1. Only deal with an independent advisor.<\/strong> Your financial advisor should have nothing to sell you. No vested-interest. No commissions on investments, referrals fees, kickbacks. They should be paid the same irrespective of whether you invest in property, shares, managed funds, SMSF, repay your home loan or decide to do nothing at all. If they have something to sell you, they are a sales person, not an advisor. Independence is imperative.<\/li>\n
  2. They should be able to articulate the robust methodology which underpins their advice.<\/strong> At ProSolution, we only use evidence-based investment methodologies which means no crystal ball gazing or speculating with our clients\u2019 monies. We invest in a way that is fundamentally sound, has a strong track record and can be almost always verified with simple math. Therefore, you don\u2019t have to \u201cbuy\u201d our opinion, just believe the huge body of evidence. The absence of a sound methodology dramatically increases the cost of advice.<\/li>\n
  3. They should have a proven, long-term track record of achieving good results.<\/strong> What were their clients investing in 10 years ago and how has their net worth changed? Long term results should speak for themselves. Also, you cannot underestimate years of experience. Education can be obtained with money and a bit of time whereas experience can only be earned \u2013 there are no shortcuts. When you seek advice, it is the experience the advisor shares that is the most value. The education bit, whilst still critical, contributes far less value.<\/li>\n<\/ol>\n

    The price of financial advice<\/h3>\n

    The price of financial advice is simple to ascertain \u2013 the fees you pay your advisor. Warren Buffett says \u201cprice is what you pay, value is what you get.\u201d<\/em> Unless you have over a decade of daily investment experience, I think it will be relatively easy to justify the price of financial advice. Avoiding just one or two mistakes (if you try and do it all yourself) will more than pay for most advisors\u2019 fees. My suggestion therefore is to focus on the cost.<\/p>\n

    Don\u2019t worry about the price of advice. Cost should be your only concern.<\/h3>\n

    It is never worth compromising on the quality of financial advice. In my book, you either do it properly or you don\u2019t do it at all! There\u2019s just too much at risk. Finding an independent advisor is the most critical by far \u2013 never compromise on independence.<\/p>\n

    Of course, if you need some assistance with financial planning, we are here to help<\/a>.<\/p>\n

     <\/p>\n ","protected":false},"excerpt":{"rendered":"

    Quality professional advice almost always pays for itself. That is, a good lawyer will help you reduce risk or save money. An astute accountant will help you minimise the tax…<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"__cvm_playback_settings":[],"__cvm_video_id":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"footnotes":""},"categories":[30],"tags":[],"yoast_head":"\nThe price of financial advice versus its cost. One is critical and one is not. - Prosolution Private Clients<\/title>\n<meta name=\"description\" content=\"Many people confuse the price of financial advice with its cost. 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