Don’t take my word for it… there is a group called Super Consumers Australia (SCA) who are “the people’s advocate in the superannuation sector”. They “work hard to keep the super industry accountable and fair.” They’ve recently partnered up with CHOICE, Australia’s leading consumer advocacy group.

One of the targets of SCA are the conflicts of interest that exist in the financial advice and superannuation spaces.

When it comes to financial advice, SCA believe that asset-based fees, that is, percentage-based fees, represent the most egregious conflict of interest as they “bear no relationship” with the work done by the adviser.

SCA is just the latest in a long line of groups and individuals trying to increase people’s awareness of this conflict of interest.

SCA also believes the financial advice provided by superannuation funds is just as conflicted as that outside of super.

There’s not really much more I can say about it other than you have a choice in how you pay for financial advice.

There are businesses, including mine, who recognise this perceived conflict of interest and therefore choose not to charge advice fees on a percentage basis.

So, if you are already paying for advice or thinking about getting financial advice make sure you are clear on what you will be paying in fees. Shop around. Ask questions. Don’t solely rely on a recommendation as many people don’t understand what they are paying or how they are being charged.

Financial advice can change lives for the better, but how it is paid for can have a huge bearing on how big this impact can be. I encourage you to choose wisely.

It’s worth pointing out that when it comes to superannuation, the fees you pay for your super fund to manage your money are also based on percentages.

Many people simply don’t realise how much the fees on their super are costing them. Once we look at it in detail and look at the alternatives available, it can be a life-changing moment. Getting your super invested in a way that is right for you, with ultra-low fees, is one of the most significant things you can do to change your financial future for the better.

Why is this important? Well, a new study from the University of Pennsylvania’s Wharton School has found that people’s happiness and wellbeing increases with more money. You might think that’s obvious, but the reason is very simple… it grants more freedom!

The equation is this: Paying higher-than-necessary fees both for advice and for the management of your superannuation could see your future self having less freedom and less choice.
Financial advice should be an investment in your financial future.

Utilising superannuation is often the most tax-effective way to save and invest for your financial future.

Both can be hugely powerful, but how you pay for both matters. Harness the power of both and you’ll maximise your future financial freedom.

Cheers,

Daniel