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Welcome to my first blog. The intention of this blog is to raise issues faced by myself and many others in the financial advice industry on a day-to-day basis.

Financial Advisers are about to be hit with some significant legislation which will change the way many operate their businesses, and ultimately should increase the level of professionalism in the industry and give greater confidence to the public in their ability to source competent financial advice.

Financial advisers do NOT all drive BMW’s and earn six figure incomes. We do not have the same advantages as many other professions!

Accountants and Lawyers, or Doctors and Dentists, have the luxury of customers virtually having no other choice but to come to them. Few people represent themselves in court without a Lawyer with the knowledge, skills and experience required. While many could do their own tax returns, financial statements, GST returns and business tax returns are somewhat more complicated, requiring the knowledge, skills and experience of an Accountant. And who would treat themselves for anything more than minor health problems? If you want prescription drugs, you have to buy them from a Pharmacist!

But people rarely seek financial advice, it usually has to be SOLD to them! You don’t NEED insurance until after a serious event occurs, you don’t NEED to save for retirement when it is years away, you don’t need advice on where to invest when you can read advertisements from the bank or Finance Company in the newspapers or on Television.

It is only when it is too late to get advice that you may realise your mistake. It is believed that up to 80% of all money lost in Finance Company failures were by individuals who invested directly with the finance company and did not seek any financial advice from a suitably qualified financial adviser!

Recently a Fair Go item highlighted a man who had his leg amputated, but did not qualify for a payment from his Trauma Insurance policy. I believe he had cancelled his Income Protection and Permanent Disablement policies without seeking advice, but both of those policies would probably have paid him something after losing his leg!

He bought the policies from his bank at the same time he was taking out a mortgage with them. Banks tend to insist that their customers have some Life Insurance at least, before they will provide them with a mortgage. So the borrower is put in a position where they need to arrange the cover quickly and therefore will feel obliged to take the protection out with the bank straight away, without taking the time to see what policies are available elsewhere, or getting advice from a Financial Adviser who can offer more than one insurance companies products.

Sadly it appears many bank advisers look only at the protection required for the mortgage, and ignore issues the borrower may have with having additional protection for their family or business.