In the
past fortnight, I have had three conversations with three different individuals
that highlight the need for people to proactively "fact check" the
information they are basing their financial decisions on.
The first
conversation follows a common theme that pops up every few years or so. I was
at lunch with an acquaintance, and no, not one that I was actively prospecting,
when the subject of Self-Managed Superannuation came up. My lunch partner
queried whether or not it is true that you can access your superannuation
earlier if your transfer it to a SMSF. I cannot stress enough that the answer
is no. Absolutely not. If anyone comes to you with a way
to access your superannuation early, then it is a scam. Superannuation is
superannuation, and subject to the same laws and regulations no matter if it is
industry, a master trust, wrap account, or self-managed. As the Trustee of the
SMSF, you are physically able to withdraw the funds, but, as we should all realise
by now, just because you can do something, does not make
it legal.
What if
one goes to a financial planning professional, and rather than provide advice,
they provide you with product options? I would probably recommend that you seek
a second opinion. Part of the "know your client" process is finding
out about the client's goals. This may be limited to superannuation, insurance,
or be part of a broader life strategy. Either way, you are paying a
professional to devise a strategy that will get you as close as possible to
your goals, or, if that is not possible, they should be helping you to
prioritise which goal is the most important. It is not up to you, as the
client, to research options to decide which suits you the best.
When you
receive a Statement of Advice (SoA) from a Financial Planner, and that SoA
recommends a replacement product, please, please, read the the
Replacement Product section. This part of the SoA outlines any increase in
fees, premiums, and changes to any terms of the product that may be detrimental
to you. The number of times that people have agreed to insurance policies that
provide less cover, with higher premiums, and exclusions to boot is terrifying
(obviously, not recommended by myself). Ask the question, "Why
change?". I love it when clients ask me this question, because it means
that they want to understand, and I love educating the client. It is very
awkward to tell a new client that their previous adviser has given sub-par
advice, and that they have agreed to it. We don't like to it, and clients
definitely don't like to hear it.
So, the
moral of the story is to listen to your professionals, but always question
them.
Find
Erin* at Achieveit Financial Planning, or call for an appointment on 07 4638
5011.
*Authorised
Representative of Securitor Financial Group Ltd ABN 48 009 189 495 AFSL 240687
This is
general information only and does not consider your personal circumstances. You
should not act on any recommendation without obtaining professional advice
specific to your circumstances. We recommend you speak to a financial adviser
before acting on any of the information you read on this website.
