Everything we see, read and watch these days is designed to do one thing. Sell you something!
Our economy is based on consumption, if consumption of products drops our economy will slow. Americans are at present the world champions of consumption. So, it is no surprise that our market keeps a close eye on the US.
You must keep this in mind when you are dealing with any company or person supplying you a service. Are you receiving advice or being sold a product? Conflict Free Advice is hard to come by.
What is Conflict Free Advice?
At Grow Your Wealth, we have our own Australian Financial Services License (AFSL). We are not licensed under any of the big investment banks or brokers.
Because of this, we are free to recommend any product that we believe will truly meet your needs. We are not constrained by having to offer products that are wholly owned by a parent company. Our advice is conflict free.
We choose for you the product that best suits your needs. Our fee is the same no matter which product we choose for you. No part of our staff’s remuneration depends on how much of your money they invest within a certain product or service.
Most advisers in our industry are licensed through a larger parent company. This parent company provides the products the advisors sell.
This in my view causes conflicted advice, as they will mainly recommend their own products. It only makes sense for the company and its employees to look after themselves.
Some samples are as follows:
- NAB owns MLC
- CBA owns Colonial First State
- Westpac owns BT Fund Manager and Asgard.
- AMP is more obvious
So how can you tell if the advice is right for you?
You would need a second opinion from a Conflict Free Adviser.
But there are also advisors that appear to hold their own licenses but are licensed through these big companies.
The only true way to check is online. Visit the ASIC website. But you will need to work your way through the holding companies before you get the truth. It is a hard process if you are not in the industry.
So why is Conflict Free Advice important?
- You can be confident that you are getting advice not an elaborate sale pitch for a predetermined product.
- The advice will be specifically for you and not a one-size fits all off the shelf plan.
- The strategy will focus on your needs, concerns and lifestyle and not provide standard advice for people your age.
- The investments chosen will be based on what you need, not chosen based on what product the parent companies push that month.
The financial system is a minefield, with plenty of people looking to benefit from people's lack of knowledge.
Keep in mind that the company who’s product you are invested in make their money from selling you the product, not from you achieving your goals. They still get paid even when the value of your invest falls.