Where’s my super gone?
I want to alert you to what appears to be a disturbing case of inappropriate super advice (or lack of it) that has affected a large number of people recently.
Over the past couple of months I have spoken with numerous people, mainly in their 50s and 60s who have fallen into the same situation – and I know there are many, many more.
What happened?
The chain of events is largely the same:
Client clicks on a social media post to look at other options for their super.
Client is called and ends up moving their super into an SMSF. This is apparently done WITHOUT a Statement of Advice. That should sound alarm bells.
Client ends up invested in highly illiquid funds with no guarantee of the funds being accessible when they need it (retirement). One client tried and was denied. Remember, they need the funds in about 10 years or less.
Investment fees are unusually high, very high.
What are the issues here?
In Austalia, personal financial advice needs to be provided with a Statement of Advice. The point of that is to show clients how the advice is in their best interests. We are even required to file note that we presented the advice to our clients and the nature of the discussion and that we are satisfied that the client understood the recommendations.
None of the people I spoke to were aware of the illiquidity and high fees.
It just doesn’t seem to pass the pub test. These people are not high flyers or sophisticated investors – we are talking $150,000 to $300,000 in super. Now, these investments may end up being the best thing ever, but it looks and smells as if the advice is inappropriate.
Phones are now going unanswered, emails not responded to.
What’s the point?
The point is you should be satisfied with all parts of the advice process and the advice itself. You should:
Receive a Statement of Advice. I know you don’t want to read it all, but it’s in your interests to be informed.
Ask about fees and where/how they are paid from.
Ask about how the advice benefits you.
Ask about the alternative stratgies/products we considered for you.
Ask about our complaints process.
Ask about what sort of ongoing service you are entitled to.
These individuals were being proactive which is commendable. But getting on the front foot may have avoided where they are right now. One of them commented to me that they asked themselves “should we speak to someone else about this?” Trust your gut.
Your choices
If you are like these individuals and want to do the right thing for your finances, just reach out for a free call. At no point will you be pushed into anything and you only commit once you can see the benefits.
It’s too important to get it wrong and to leave it to someone you don’t trust.
The information contained in this blog has been provided as general advice only. The contents have been prepared without taking account of your personal objectives, financial situation or needs. You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs.