Great post and indeed you make some very valid points.
There are no doubt some very honourable FP's with morals and high ethical standards however in the time I was involved I didn't see them. As you say I watched FP's complain about a product that was researched and found to be suitable for the client, didn't provide them with either a high enough commission or a commission at all!
The one thing that really got under my skin was the complacency regarding the client's capital and where/how it was invested. Put simply too little time spent monitoring it on a continuous basis and IMO this showed up in the washup of the GFC;
Had FP's set their client's investments up using what is commonly referred to as a "bucket strategy" prior to the GFC then people approaching retirement would have been able to retire instead of being forced to remain in the workforce whilst their super regains it's value.
The "bucket strategy" works whereby the capital is divided into three separate investment vehicles;
1. Cash & Term Deposits income) - sufficient capital for 2 years 2. Mix of growth/income investments 3. Growth investments
It essentially works on using the cash funds to live in retirement instead of having to sell the growth assets at firesale prices when the GFC struck hence wiping out your retirement capital.
I have simplified this however I hope it makes sense.
In the FP's defence however I found that many clients essentially wanted champagne for beer prices ;( But perhaps those clients had been burnt by FP's previously and knew they were only going to receive substandard service and wanted to pay accordingly?
IMO ASIC are making the FP industry so compliance driven they are making it more and more difficult if not impossible for the smaller boutique firms to survive. IMO ASIC's agenda is to push out all the small fish and in the end only have a small number of much larger firms - banks etc.
The most important thing that anyone can do IMO that's related to creating personal/family wealth is put in place a properly drafted will and Enduring Power of Attorney.
The second most important thing when one has a spouse & children is adequate life/tpd insurance so that should the unforseen occur they taken care of.
For me these were a no-brainer, what I refer to as "sleep at night decisions" ;)
Enough rambling from me, I'm starting to sound like a FP. LOL
