The importance of being skeptical

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.