Not all advisers are bad apples

Bruce Brammall, The West Australian, 24 September, 2018

I won’t defend stupidity. I despise laziness. Watching deceit in action makes my skin crawl. And I tend to smell most bullshit from a long, long way away.

My son, DebtBoy, is finding out about my “bullshit” meter on a regular basis now. “Dad was your age once, buddy”. He loves you. Dearly. But, damnit, he knows your tricks and what makes you tick. And when you’re talking bollocks.

You’ll have your own hates in human traits. But they’re mine, which has made watching my profession being smashed by the Royal Commission a bit sickening.

All of those behaviours have been uncovered, almost daily, and publicly, in the Royal Commission.

I accept that it would appear that dickheads dominate the financial advice and mortgage broking industries.

But they don’t.

For every greedy moron or arrogant executive who has been, or will be, rightfully pushed out of the finance industry, there are more than enough great professionals making huge positive differences to the financial lives of Australians.

The real problem is finding the good ones to work with. Find ones who you feel understand your needs and what makes you tick. And then accepting or paying a reasonable price for their services.

Good advisers are worth far, far more than you’re likely to pay them, directly, or indirectly.

There are some elements of what good advisers do that are straight coaching. Other benefits come from pure peace of mind, particularly when it comes to insurance (which you’ll hopefully never need to use, but will thank your lucky stars if you do). More still will come from good tax planning and preparing you well for retirement.

The most important thing a financial adviser can do? If you let a good financial adviser in, they will help you understand that a bit of pain now will deliver dividends down the track.

Good advisers will get you to happily make some sacrifices. Now. And will be able to explain to you that nobody achieved anything good without some level of deprivation.

A good adviser will, after a little while working with them, make you wish you’d met them five or ten years ago.

They should make you understand the benefit of the sacrifice. I’m not just talking about superannuation salary sacrifice, where this is usually a direct tax benefit.

The sacrifice is in understanding the value of not spending money now, but instead putting something away for your future. Perhaps instead of having so much of your savings in cash, that some of it should be going towards longer-term assets, such as property and shares.

That sacrifice might be just not being able to spend money now – cutting expenses. It might be not spending now to put away to create an income stream for later.

For the cost of $250, or $500 or $2000 a month now, here is where you are likely to be in five, ten or twenty years time. And why you should increase that allocation of savings for your future self over time.

Here is the value of that sacrifice in 10 years. Here is the income stream you’ll earn in 10 years, or how much better your super will look, or how many other choices you’ll be able to make about life, or when you can afford to retire, or how you’ll be able to meet those private school education fees.

They will be able to explain the value of that sacrifice. And it’s so often so hard to see, when you’re struggling with the daily grind of meeting mortgage repayments and raising kids and trying to stay afloat.

They will help you make the decision that you need to make – by not putting off the “plan” for wealth creation for another year, but to get started on it.

Now. I mean like I wish I’d started on it 10 years ago.

But, good lord, it’s hard to see that financial advisers provide anything of quality or value at the moment. The daily revelations in the Royal Commission are drowning out everything.

That’s okay. As I’ve said many, many times in this column, occasional clean-outs of any and all industries are needed. The financial advice profession is no exception.

The cleanout will come. What will be left behind will be a profession you’ll be, rightly, able to have much more confidence in.

Bruce Brammall is the author of Mortgages Made Easy and is both a financial advisor and mortgage broker. E: bruce@brucebrammallfinancial.com.au.