Mr Coory says that, on average, most super and allocated pension funds are paying 1.5% more than they should and this extra cost is increasing their investment losses, reducing the predicted average future performance of 8% gross to a net 6.5%.
“So what are you paying your financial advisor for?,” Mr Coory says. “The best strategy to deal with this coming period of underperformance will be to reduce ongoing management fees on your retail super and allocated pension funds.
“At Harrod’s Financial Services, which is a fee-for-service financial planning practice, our motto is reduce ongoing management fees and increase your investment profits; reduce ongoing management fees and decrease your investment losses’. We do not charge ongoing trail commissions or advisor service fees because an investment portfolio should be established with the end goal in mind and should not need constant monitoring.”
Mr Coory says clients can save thousands in fees every year, and these savings lead to hundreds of thousands of dollars over 20 to 30 years.
“I believe most people cannot afford to just throw their money away in fees. Retired investors can reduce ongoing management fees by as much as $5,000 to 6,000 per annum on their allocated pension funds and use those savings to fund there pension drawdowns.”
Mr Coory says it is important to understand that ‘fee-for-service’ financial planning does not mean that your advisor is not looking after your ongoing interests.
“It simply means we do not charge ongoing fees like most financial planners to be interested in your ongoing financial welfare. Instead, when our research department determines that changes would be beneficial to a client’s financial affairs, we make them aware of it and if the client chooses to follow the advice they pay a set fee for it.”
Mr Coory believes there will be a major shake-up in the financial services industry as investors begin asking the question, ‘What am I paying my financial advisor for?’
He says this has already begun, and that future underperformance in investment returns will exacerbate investor questions and concerns.
For a free copy of, ‘What am I paying my financial advisor for?’ call 1300 65 20 60 or register on the Harrod’s website.