It’s your money so back yourself
A WOMAN I’ll call Lynne em emailed me with the subject lin line “Devastated”. Here’s what she wrote: Over the past three years I ha had become increasingly an anxious about the state of my fin finances, which have been co controlled by my ‘trusted’ fin financial advisor of seven ye years. Finally, I sent him an em email last Friday asking him th the three questions you su suggested in your book.
He replied the following Monday, terminating forthwith his services! I am a single mother of three adult children, without a home, living alone, paying rent. During the seven years he has been my advisor, my capital assets have been reduced by over $500,000 (to $800,000). What can I do? Lynne I’ll answer Lynne’s question in a moment, but first, here’s the cut-and-paste email I wrote about in my book: Dear (advisor’s name) I’ve decided to do a review of my finances. Could you please do the following three things for me:
1. Print me a statement that clearly shows my annual percentage return since we began, net of fees.
2. Benchmark my return against the relevant accumulation index for the same period.
3. Provide me with an itemised list of fees (expressed in both dollars and percentages). Include any and all ongoing fees, commissions and administrative costs that I’m charged. Kind regards, Client Lynne, you can almost picture how this went down:
Your advisor double- clicks on his email: “Oh, I got an email from Lynne, I wonder what she’s up to …”
As he starts reading, his eyes begin to squint like he’s getting a root canal.
And then he gets to the end of your email and spits out his frappuccino all over his mainframe.
Lynne, know this: good advisors — and there are many — actually want their clients to ask them these questions. They can justify their fees because they’re working in their client’s best interests. A good advisor wants smart clients who understand and value good advice.
A shonky advisor, on the other hand, will do what this guy just did — sack you and move on to the next chump. They see you as their meal ticket. It’s not personal. It’s just lunch.
So now it’s time for you to lodge a complaint with the Australian Financial Complaints Authority (ACFA) via their website (acfa.org.au).
Back yourself. Remember, no one cares more about your money more than you do.