You’ve worked your whole life and finally made it to retirement age. You are starting to get excited about the next big adventure, maybe it’s an overseas holiday or road trip around the country. You’ve been saving and saving and it’s almost time to reward yourself for a lifetime of hard work. Then you look at your super fund, and something is not right…
As devastating as this scenario seems, unfortunately, it is not an uncommon occurrence. Shane Roberts has been Practising Law for 25 years. He specializes in financial services, and regularly consults with clients who have made it almost to retirement only to lose everything. This is commonly the result of bad financial advice. In this article Shane shares some advice on what you should do if you feel you are in too deep with an advisor who has invested your money in a way that doesn’t seem to add up or you just don’t fully understand.
What are the warning signs that I may have invested in some bad financial advice?
Shane Roberts says the typical profile of a person he helps is someone who is about to retire or has just retired. He says “[they are] Often a couple who have worked hard all their lives to put aside a bit of a nest egg.”
According to Shane what happens typically is these people “run into strife when unfortunately they deal with somebody who gives them financial advice, a financial planner for example, and following that advice they end up in a situation where they are essentially left destitute, just at retirement age.”
Shane says that the financial planners and advisors that are causing these problems are a minority in the market. He says the majority of financial planners and financial advisors “provide a great service and really look after their clients”. He goes on to explain that one of the main red flags to be on the lookout for is when the advisor has not been acting in the best interest of the client. His advice is to ask yourself the following questions: How much in fees have they taken over the last couple of years? Have they tried to restructure you as their client from a more stable structure such as a big fund into a self-managed super fund? They might also be collecting a nice little fee from the audit of that super fund. What else are they doing to maximize the fee they can take away from the client? These are all signs that the financial planner or advisor might be acting in their own interest and this is when you should be speaking to someone like Shane about your options.
I know I have received bad advice. What should I do next?
Unfortunately, even when a person is certain that they have received bad financial advice, they often do not immediately seek advice. This is most likely due to something Shane refers to as ‘the embarrassment factor’. He says “Nobody likes to feel that they have been hoodwinked particularly around retirement age.” Shane says that when people come to him to seek advice on what to do about their financial issues it is often as a last resort. He stresses that it is important that anyone seeking advice should not delay. “It is important that someone who comes and sees me does so straight away because there are some strict time limits.” Shane goes on to explain that if someone has received bad financial advice and lost their money, insurance may be able to help that person recover their money, however, if that financial advisor goes into liquidation that may have an impact on what coverage is behind them. “We will need to do some quick investigating on what has happened, how much you have lost, and finally what resources may be available to recover some of that loss.”
How do I know my privacy is being protected?
After working hard your whole life to make sure you are comfortable, only to make a mistake at the end that leaves you in financial trouble, is something some people are ashamed of. Shane reiterates that while he can understand the ‘embarrassment factor’, no one needs to be embarrassed because that’s all in the past. That being said he understands why people may be concerned about such a personal matter going public. “What we will try to do usually is get to a stage where we can resolve the matter with ‘the other side’ ‘the other parties’ (financial advisor or planner) without going to court. Shane says that often “when you approach the other side you can sit down with them on a confidential basis without prejudice, maybe with a mediator and see if you can get a resolution and get the money back.” Shane says that the end goal is to “restore their retirement and get on with their life.”
If this situation is feeling a little too familiar it may be time you got in contact with a qualified advisor such as Shane Roberts. Shane regularly refers clients to Insolve as we will often have the resources needed to help his client restore their retirement and get on with their life. Don’t let a bad experience with a financial planner or advisor ruin everything you have worked so hard to achieve.