What is fee for service financial planning?

Fee for service financial planning is where a client pays their financial adviser a fixed fee for the services and advice they provide.  Much like you would pay your mechanic to service your car.

Currently in Australia there are two main ways that financial planners are paid Commissions and Fee for Service:

1. Commissions – this is the most common form of remuneration for financial planners in Australia.  It is where product providers or financial institutions pay financial advisers a commission when their client invests or purchases their product or investment.  There are generally two types of commission that are paid:
   - Upfront commissions which is a larger lump sum amount paid to the financial adviser when the product or investment is first set up.  This lump sum amount varies depending upon the arrangement with the provider but is generally around 4%
   - Trail commissions which is a smaller ongoing commission which is paid to the financial planner usually on a monthly basis for the life of the investment or as long as the client retains the product or advises the provider that they have transferred to another financial planner.  The average trail commission is around 0.8% per year.
2. Fee for Service – this is a less common form of remuneration for financial advisers where instead of receiving payment from the product provider, the client pays their financial planner directly for their time and advice.  Often there will be a set fee either based on an hourly rate and/or packaged based where you can choose to pay for particular services such as a full Statement of Advice or setting up of a Self Managed Super Fund.

Which financial planning payment style is better?  Commission vs fee for service?

There has been a lot of debate in the media about which style of remuneration provides is better for clients.  The overwhelming majority of financial advisers in Australia are still commission based but our opinion is that fee for service financial planning is much better for clients as it lessens the risk of a conflict of interest.  When a financial adviser is paid by a product provider we believe that they are inclined to work for the commission rather than work for the client.  This can result in clients being “sold” into products which may not necessarily be the 100% best option for their needs.  Say your financial planner has 2 options of where to recommend you invest.  One is better for your needs than the other, but the lesser alternative happens to pay the adviser a larger commission.  You can see where the conflict for commission based financial planners arises.

In addition is the problem where most financial advisers in Australia don’t offer advice in areas such as budgeting, savings, and tax structuring as because they aren’t placing their client into a product they don’t get paid.  Many people need this grassroots financial advice from a professional and aren’t getting it for this reason.

At Financial Spectrum, we believe that fee for service financial planning is the way forward.  We know that we are in the minority of financial planners in Australia but we believe that this payment structure offers the best service to our clients and enables us to give advice to our clients in all areas of financial advice.  At the end of the day, it is our clients who pay us for our service and advice, and it is our client that we are working for.

Financial planning, something we all know we need to do, but
always put off to the future. Financial planning is hard simply
because it requires financial discipline, which is difficult to
have in this consumer society. However, financial planning is
very important because you want to retire one day, be
financially stable in the event of an accident, or unexpected
loss of a job. Financial planning will help you rest easy as you
age.

The following tips will help get you in gear to start your
financial planning. Once you have made financial planning part
of your routine, it won’t seem so difficult. But getting your
financial planning started can be the most difficult thing.
These tips will help motivate you to make financial planning one
of your main goals.

Financial Planning Tip #1 Pay off Debt One of the biggest
factors fighting against financial planning is debt, especially
credit card debt. If something starts off as a small debt it
turns into a big one simply because you were not paying off the
debt. Financial planning means you have a plan and paying off
debt should be the first goal of your plan.

Financial Planning Tip #2 Invest Another financial planning tip
is to invest. Financial planning means you are saving for the
future in many cases, so you will want to take money you earn
today and invest in the stock market, in bonds, IRAs, 4019k) or
a mixture of all of the above. Saving your money with the help
of financial planning will help money grow all on its own.

Financial Planning Tip #3 Spend Less than You Earn This is tough
for people to understand and often times what they resist most
when they begin financial planning. This is because Americans
always want what is bigger and better. Regardless, financial
planning is more important than consumerism. Make spending less
than you earn part of your financial planning.

Financial Planning Tip #4 Budget A great financial planning tip
is budgeting. You won’t be able to save unless you know what you
spend. Make budgeting part of your financial planning and you
will realize saving is not so hard.

Ten Thrifty Tips to Beat the Crunch

With the all the current doom and gloom of job redundancies, negative equity and rising fuel costs there has never been a better time to start living by some of the old clichés, like tightening your belt and saving some pennies for a rainy day. We’ve put together our top ten thrifty tips to help you save some money and beat the crunch.

1. Switch your pet to dry food. It’s healthier for them and much cheaper than the tins and pouches. What’s more you can feel smug knowing that not only are you keeping your pet in tip top condition, but you’re also helping save the environment by reducing the amount of packaging that you’re chucking away.
2. Compare electricity and gas providers online to ensure that you’re getting the best deal on your household utilities.
3. Quit your gym membership and start cycling to work. As the evenings get lighter and the weather warmer, you’ll find cycling can be quite a liberating experience. It also gives you the chance to kill not two, but three birds with one stone, as it keeps you fit and healthy, is good for the environment and free! Meaning no more expensive travel cards or trips to the petrol station.
4. Order your weekly food shopping online. This will help you avoid picking up special offers on items you wouldn’t normally buy and don’t actually want. It also saves time and cuts out that stressful trolley dash every Saturday morning.
5. If you regularly enjoy drinking a glass of wine (or two) with your evening meal, consider sampling some wine clubs. Most companies offer very competitive deals on your first case, so it pays to keep switching! You can also read the accompanying taste notes and impress your friends when you flaunt your knowledge as a wine connoisseur.
6. If, like me you’re an avid reader, you probably get through at least one book every week. When you tot up the cost of new books up over a year it soon mounts up. Signing-up for a library card could help you save up to £30 or more every month. Now-a-days most libraries offer a good selection of new DVD and CDs which you can borrow for a small cost. You can also renew your borrowed items online to avoid those late fees.
7. Book a bargain holiday through Teletext. They currently have some of the best offers to be found anywhere on the Web, such as an all inclusive three star holiday to Turkey for just £166. As Turkey is still outside of the EU you’ll also benefit from a better exchange rate on your holiday spending money.
8. Start making lunches to take to work. A recent survey found that on average people pay in excess of £5 a day for their lunch. Over the course of a month that adds up to a whopping £100! If you really can’t face making sandwiches every morning, try cooking a bit extra with your evening meal and taking that with you instead.
9. Enjoy a free day out. If you’re stuck for things to do at the weekend now that shopping’s off the list, why not enjoy an educational trip to a museum. Most of the major museum’s and art galleries in London are now free and well worth a visit. Plus the exhibitions change every few months which means you can pop back for a regular dose of culture.
10. Sign-up to all the voucher code websites and get loads of freebies and money off vouchers for all your favourite shops and restaurants (well after all that saving, everyone needs a treat!).

When applying for a credit card we need to understand the need for credit cards in this internet age. Where this can be for many different reasons. For instance some people might need help with their bills that they cannot pay. Then there are people that want a credit card so they don’t have to carry cash around or maybe just they just want to shop online. Or maybe you need one to go on vacation with. Whatever your reason is, most if not all people know that they need a credit card. But the bad part is that credit cards are not handed out so easily. Where most people have to apply for a credit card before they can get one. So if you are thinking about getting a credit card, then you should read on.

You can apply for a credit card using several different methods. The best way to apply is by going online which can give you instant results, next is to call the credit card company, and then the most used is to fill out the application that was sent by mail. Please keep in mind that when you apply for a credit card that your personal information will have to be presented. As all credit card companies will need your social security number so that they can run a credit check. Where your credit score can determine what your APR (annual percentage rate) will be.

Please remember before you apply for a credit card, it would be best that you do some research you do some research on which credit card company offers the best APR rate and bonus programs. Lots of credit card companies have a low introductory APR rate for new credit card holders especially those whose credit score is very high. There are also some credit card companies that offer no APR for 12 months or more. There are also the bonus programs that credit card company’s offer, which can vary where some offer cash back bonus rewards. Some have free airline mileage. Others give you points towards specific items.

The last things you should research when applying for a credit card is if there is an annual fee to have the card and what your credit limit will become. Some cards have an annual fee you must pay up front just for having their credit card so you may not want this type of credit card. When deciding on a credit limit, most credit card companies will base it on your income meaning your ability to pay it back and your credit score. As it is a must that you never get a credit limit that is too high for you to pay off which will have devastating results on applications in the future.

Then you should remember one of the most important tips when applying for a credit card, is not to apply for to many cards which makes research so important, where having to many companies checking your credit report will actually lower your credit score. But these are some important tips on how to apply for a credit card. With there being dozens of companies to choose. So take you time and pick the best credit card that will suit your needs before you apply for it.

Do you always end up having too much month at the end of your money? Are you over stretched and unable to meet your financial commitments? If the answer to these questions is yes, maybe you should have a serious look at your personal finances and see whether you are managing them properly.

A good personal finance manager spends within their income, plans for the future and solves financial problems as they arise. Poor personal finance managers pay more, do without and fall behind. If you find yourself in the second category, you can do something about it. You can learn to take charge of your finances by planning your personal finances.

If you are just starting to take your financial planning seriously then you will need to follow these personal finance tips.

You need to find out your exact financial situation. To do this you must gather as much accurate information on your personal finances as you can. You can use this information to calculate your net worth. Included in this information should be all assets, savings and real estate. It is then that you can decide how much is left for you to save for the future.

Making a personal finance budget is a good place to start. This is made up of information about you income and expenditure. The personal finance budget should cover a year at a time and worked out on a monthly basis. It must be accurate to ensure that you are able to meet you financial goals.

All expenses must be included. To be sure of that go through all your paid bills, check register and credit card receipts to find expenditures that recur every month and expenditures that happen less frequently. Personal finance budgeting requires some small sacrifices. To be able to make good personal financial decisions and set priorities, you must know where your money is actually going. Start your budget and accomplish your goals.

Pay your bills by Direct Debit. This will make bill payment much more convenient. All payments are made immediately and good records are kept which help you keep on track with your budget.

Make an investment and finance plan. Now that the fundamental state of your personal financial security has been established, the time has come for the more prosperous part of your personal financial life. You need to make a personal finance plan of what you really want in life that money can buy. Your personal financial plan can be as simple or as detailed as you want it to be. Find out how to finally start to implement this plan and get the money to finance it. This is the long term part of your financial. This journey is the most interesting and exciting part of personal financing you can have toward financial freedom.

You can prepare for a secure personal financial future by following these simple tips. When you take control with your money, you don’t have to worry about debt taking control of you.

Minding your finances doesn’t have to stressful and overwhelming. There are many people right now that are worrying themselves right into the area of heart attacks because of money, or rather the lack of it. No one needs to let themselves get to this point when there are personal finance tips to follow that are simple and will leave you able to sleep at night.

The biggest tip to follow for your personal finances is to learn how to be frugal. This is especially true for those young people out there that are just stepping into the wig world of money. Don’t spend on unnecessary items. If you see something that you want, don’t spend to get it right then. Make yourself go home and think about it. Chances are you will end up making the decision not to buy it.

In addition to frugality, you should make a budget and live by it to the letter. Sit down and write out what you must pay each month to live, as far as rent and living expenses. Don’t add in things like a shopping trip with your friends at the mall each week or that little gift for yourself because you worked hard all week. These kinds of things are wasting precious money that you could be saving up to have on a rainy day.

Avoid unnecessary debt like the plague. Going into debt means that you are going to lose more money every month to interest and other fees related to that debt. This is money that you will never have the chance to even squander. You will never see those dollars except as they go out the door and into the hands of someone else.

When you make the guidelines for  your budget, make it a point to turn it out where you are going to be spending a lot less than you are earning. This is going to leave money left over to save. Make sure that you also pay your bills on time so you can save yourself from late fees as well. These may seem like little things, but they add to being a whole lot later on. Personal finance tips can be sticky and hard to follow sometimes, but to become financially stable, you must learn early on to make sacrifices.

Find ways to make more money. This may come in the form of getting a degree or it may be that you can go higher in the job you have. Education is one of the essential keys to success, especially when it comes to earning a high salary.

When you get paid, you should take at least 10% right off the top for a savings account. This way, in the event that you lose your job or you have something happen to you that causes you not to be able to work, you are going to have some money to go on until you change course and get resettled. A lot of people have hit rock bottom and never made it back up because of situations like this happening and they didn’t have a savings to depend on. These personal finance tips will help to become a better money manager.