Our Financial Planning Process

As professional financial planners we follow the requirements of the Australian Securities and Investments Commission (ASIC) as well as the Financial Planning Association (FPA), both of which state the importance of "knowing the client" prior to giving any investment or financial planning advice.  The reason for this is simple.  Unless we understand your present circumstances and future goals, together with your Risk & Return Profile, we cannot provide you with meaningful advice.  We therefore have a formal financial process with several steps:

1. We ask you to complete our Financial Planning Questionnaire which you can either download by clicking here or receive as an emailed Word 2000 document by clicking here.    If you require assistance with the questionnaire an hourly fee will apply.  Once you have completed our questionnaire, you will need to sign and post it back to us.
2. Once we have received your completed and signed questionnaire, we will be able to provide you with an estimate of the cost to complete your Personal Financial Plan, known as a Statement of Advice.  
3. Your Personal Financial Plan is our formal advice to you and is available as either Basic Limited Advice or Comprehensive Strategic Financial Planning Advice. The choice is yours as to which version of the Personal Financial Plan that you would like us to prepare for you and it is simply a matter of indicating this on your questionnaire.

Basic Limited Advice - This version provides investment product recommendations that are restricted to your available funds for investment and disregards all other aspects of your circumstances and future goals with the exception of your Risk & Return Profile.  In other words, this is basic and limited investment advice and is therefore quicker to produce and thus cheaper for you.

Comprehensive Strategic Financial Planning Advice - This version deals not only with your immediate investment decision regarding your available investment funds, but considers all aspects of your present circumstances and future goals together with your Risk & Return Profile.  In other words this is your financial road map which will show you the best way to achieve your financial objectives.  Comprehensive strategic financial planning advice is strategy based, rather than product based and as well as making specific investment recommendations, includes appropriate advice on cash flow, taxation, superannuation, insurances, estate planning and retirement planning;  together with an estimate of the probable outcomes of the recommended strategy.  Because comprehensive strategic financial planning advice is quite detailed, it takes longer to produce and is therefore more expensive than basic limited advice.

4. Your completed financial plan is produced in a bound hard copy format and posted back to you with the relevant prospectuses and application forms.
5. Once you have received your completed financial plan please consider it carefully.  At this stage you may accept our recommendations, in which case you will need to complete the enclosed application forms and return them to us with your cheques made out to the recommended financial institutions.  We will then process your new investments and arrange for a full refund of all initial commissions, which means that in nearly all cases you will not have to pay any entry fees on your new investments.
6. We are happy to discuss your financial plan with you or even amend your financial plan if you wish, however hourly fees will apply for these additional services.
7. Once your investments are in place we will review and assist in the management of your portfolio if you are using our Active Investment Management Service or Online Investment Account or be available to discuss or review your portfolio if you have chosen our Investment Consultancy Service.  Please see our Financial Services Guide or a full description including fees for these services.

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Investment Planning and Portfolio Management 

The success of financial planning is very much dependent upon the quality of the advice that you receive.  At Direct Advisers we believe that although the initial advice is very important, it is in fact secondary to the ongoing management of your investments.  It is a reality that changes to an investment portfolio will be inevitable. These changes may stem from economic forces, world events, changes in legislation, investment performance or indeed changes in your personal circumstances. Therefore our primary role is to establish a long and enduring relationship with you so that we can assist with the management of your investments. 

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Financial Planning – Investment Service Options

We offer

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Fee For Service

Many investment advisers are paid by way of commissions from financial institutions when investments are placed on behalf of clients.  Our preference is to be paid directly by our clients and to not receive commissions to them.

Initial commission from investments can vary from zero to as much as 5 per cent of the investment. This method of payment has the potential to raise concerns in the mind of the investor as to whether or not the amount of commission has influenced the recommendation. Similarly, when the adviser makes a recommendation to change an investment this concern may also arise.

Ongoing or trail commissions can also raise concerns as to whether an investment product is being recommended on the basis of a higher ongoing commission than an alternative investment product.  In addition, trail commissions and other similar benefits such as volume bonuses are in fact paid out of the investment management fees that you pay to an investment product provider.  This means that investment management fees can be significantly reduced if these commissions are not paid.

We prefer to offer advice on a fee for service basis.  

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Active Investment Management Service

Under our Active Investment Management Service we do not accept any commissions whatsoever.  We believe that only in this way can you be comfortable with the knowledge that commissions have not influenced our advice.

Active Investment Management Service portfolios are constructed using a combination of actively managed and index managed funds together with direct investments in Australian shares where appropriate.  Full investment and taxation reporting is also provided as well as internet access to your investment portfolio details at all times.  We have calculated that the absence of commissions when combined with our specialised portfolio construction techniques should save approximately 1.00% in total management fees on a typical portfolio.  This equates to a saving of approximately $3,000 per year on a $300,000 portfolio rising to approximately $12,000 per year on a $1,000,000 portfolio.

There will be no additional charges for any ongoing service such as portfolio management, reviews, updated financial plans, restructuring portfolios, Centrelink assistance, consultations, etc. 

If you choose to use the Active Investment Management Service we will do a full analysis of your investment needs and then develop a detailed financial plan, which encompasses your individually tailored investment strategy and specific investment recommendations. Please note that as this is an advice based service, as a first step we will need to prepare a written  financial plan at our normal fee.

Upon your acceptance of our recommendations we will then assist you with the placement of your investments.   At this point we will commence to track your investments via our Active Portfolio Management System, and we will contact you to advise of any action that may need to be taken regarding your investments.

In addition to this, twice a year we will review your financial situation and to report upon your investments.  An integral part of our Active Investment Management Service is your personal eCASH account, which is designed to simplify the management of your investment income and to smooth out your cash flows.

This service is best suited to portfolios valued at more than $250,000.

Additionally the payment of fees for financial planning advice may be eligible for a deduction against future income tax liabilities, depending upon your circumstances.

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Online Investment Account

Under our Online Investment Account we charge flat initial and ongoing management fees with no additional fees or charges for changes to your portfolio.  Ongoing services such as a second review and other consultations are charged at our normal hourly rate.  Please note that as this is an advice based service, as a first step we will need to prepare a written  financial plan at our normal fee.

As this service uses wholesale investment funds, not only are management charges lower, but also there are no fund manager entry or exit fees, nor any switching fees when investments are changed.  

Additionally the payment of fees for financial planning advice may be eligible for a deduction against future income and capital gains tax liabilities, depending upon your circumstances.

If you choose to use our Online Investment Account we will do a full analysis of your investment needs and then develop a detailed financial plan which encompasses your individually tailored investment strategy and specific investment recommendations.

Upon your acceptance of our recommendations we will then assist you with the placement of your investments. At this point we will commence to track your investments and we will email, ring, write or fax you to advise of any action that may need to be taken regarding your investments.  In addition to this, we will contact you twice a year to review your financial situation and to report upon your investments. 

Using the Online Investment Account you will have access to your current investment balance, performance and unit price information and details of any recent transactions.  In addition, you are able to make additional investments, switch investments and make withdrawals by way of the internet.  Another advantage of the Online Investment Account is that at no extra cost you will receive full consolidated investment and taxation reporting covering all of your investments within the Online Investment Account

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Investment Consultancy Service

This is designed for clients who wish to seek advice (including financial planning) from us but who may not wish to have their investments continually managed. Our Investment Consultancy Service provides a fee based service which is charged out at an hourly / skills rate. Investments placed using our Investment Consultancy Service will receive a full rebate of initial commissions resulting in a nil entry cost to most managed funds.

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Discount Investment Placement Service

This is designed for investors who do not require advice from us but who  wish to receive a 100% rebate of all initial commissions when their investments are placed, resulting in a nil entry cost to most managed funds.  This service is provided using our subsidiary Investment Warehouse.

We can help you with all aspects of Investment Planning.  

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Retirement Planning

How much do I need to provide a reasonable income at retirement?

What sort of investments should I be using to provide for my retirement income: - Property, Shares, my Business, Superannuation or should I channel all my money into the family home?  These are questions that we are all asking.

Many Australians will not qualify for the Age Pension, therefore it is critical that you ensure that you have a strategy in place to provide for your own financial independence. That is why we have developed a range of alternate solutions.

 We will help you determine how much you need to reach your goals and, more importantly, how to get there.

Contact us:  enquiries@directadvisers.com.au

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