Most Australians ask the wrong people for financial advice

Who do you ask for property investment advice? 

A better question is …”who should you ask for investment advice?”

Who should you ask for property investment advice?

It seems like most Australians ask the wrong people

New research from Roy Morgan found 2.96 million people (14.9% of Australians 14+) were asked by their friends or families for advice regarding their finances and investments.

In other words nearly three million Australians are ‘trusted advisors’ for finance and investment decisions despite them not wealthy themselves!

 

And this large number of ‘trusted advisors’ has significant potential to influence  financial and banking decisions of the 5.4 million people who ask for their advice.

Proportion of bank customers who are asked for financial advice by family/friends – Top 16 banks

Source: Roy Morgan Single Source (Australia) 12 months to March 2017, n = 14,472.

The four major banks have very similar proportions of ‘trusted advisors’ in their customer base, with NAB being marginally ahead on 17.8%, followed by Westpac (16.2%), CBA (16.1%) and ANZ (15.5%). Among the largest sixteen banks, those with a below average proportion of ‘advisors’ were Bank SA (10.8%), Bendigo Bank (11.9%), Suncorp (13.1%) and BankWest (14.5%).

High value customers lead in incidence of ‘trusted advisors’

It is probably not surprising that financial institution customers in the top 10% (based on the total value of their banking and finance products) have the highest incidence of ‘trusted advisors’ with nearly one in three (32.1%). This compares with the population average of less than half of this level (14.9%).

Segments with above average proportion of ‘trusted advisors’

Source: Roy Morgan Single Source (Australia) 12 months to March 2017, n = 14,472.

Other significant groups with a higher than average incidence of ‘trusted advisors’, include people with incomes over $80k pa (24.9%); professionals/managers/small business owners (24.8%); and those holding a degree (20.7%).

All of the groups that have higher levels of being asked to give advice appear to have greater involvement and experience in finance and as a result others are more likely to trust in their opinion.

 

Here’s the type of advisor you may need…

An independent property strategist.

In my mind it is critical to have a trusted advisor when making property investment decisions.

It’s just too hard to do it on your own or by trial and error.

There’s a huge learning fee involved – of time, money, effort and heartache.

I find it interesting that while most wealthy people have, and are prepared to pay for, trusted advisors in many areas of their lives, the average person has no advisers or they get their advice from salespeople who they perceive as advisers but are far from independent.

On the other hand, following the teachings and proven systems of those who’ve already achieved what you want to achieve and who’ve retained their wealth through a number of property cycles, while not guaranteeing your success, makes it much, much more likely.

HOW CAN YOU TELL THAT YOU’RE DEALING WITH A TRUSTED ADVISOR?

A trusted advisor tailors their recommendations to your personal circumstances and they warn you of the risks as well as the rewards.

Their advice is not biased by any property, products or services to be sold.

So one of the first questions I’d ask them is “How are you getting paid?”

This will reveal a lot.

If they are offering free advice, or they are being paid by a third party (such as a developer or property vendor) then their advice cannot be independent.

Your adviser should be qualified and a member of a recognised organisation such as the P.I.P.A and be an investor themselves.

They should have a thorough understanding of not only property, but also finance, economics and the taxation system as far as it relates to real estate investment

Similarly, your advisor should have no properties for sale, should have a number of investment options available depending upon your circumstances, should not make any recommendations at the first meeting and should not create a “sense of urgency.”

THE BOTTOM LINE.

There is only so much you can learn from the financial media, books and seminars.

While you can gain knowledge from the Internet, you can’t gain experience.

That takes years to acquire and comes at a cost

It’s just too difficult for beginners and even for more experienced investors to gain perspective into what’s happening in today’s fast moving markets.

That takes time, money and comes at a cost.

That’s why I suggest you leverage off the experience of a professional property adviser – a property strategist – one who is independent and unbiased.

In my mind sound professional advice is never expensive, on the other hand most investors pay huge “learning fee” to the market by buying the wrong property, in the wrong location, at the wrong price.

SO WHAT WILL BE YOUR NEXT STEP?

Are you going to take advantage of the property markets or are you going to get caught by the traps ahead? 

If so and you’re looking for independent advice, no one can help you quite like the independent property investment strategists at Metropole.

Remember the multi award winning team of property investment strategists at Metropole have no properties to sell, so their advice is unbiased.

Whether you are a beginner or a seasoned property investor, we would love to help you formulate an investment strategy or do a review of your existing portfolio, and help you take your property investment to the next level.

Please click here to organise a time for a chat. Or call us on 1300 20 30 30.

When you attend our offices you will receive a free copy of my latest 2 x DVD program Building Wealth through Property Investment in the new Economy valued at $49.