Finding Financial Advice Online

Today, almost everyone has a computer and goes online for information on almost every subject. It is no different for financial advice. Most large brokerages, banks, and financial firms have websites where you can find advice on personal finances, on financial planning, on savings, and on investments. The websites offer tips on how to create a budget or obtain a mortgage, among other topics.

Many mortgage companies and banks have online websites where you can apply for a mortgage and receive an approval or denial during the same session. You can compare various mortgage companies, their rates, and the advantages or disadvantages of each financial institution online. Making it easier for a customer to obtain financial advice online is the goal of all the financial institutions, as they want your business.

You can trade stocks, manage your investments and savings, and get advice on personal planning, all online from the comfort of your home or office. Histories of stocks and the prospectus for each one can be found, as well as current figures for the stock market. There are credit counseling companies online where the user can obtain financial advice, debt management, and tips on how to avoid credit card debt. There is advice on how to keep good credit, repair bad credit, and to obtain credit if you don’t have any. You can get help creating a budget and learn how to stick with that personal budget.

Making it easy for customers to get help with financial planning helps companies get new and repeat business. You don’t have to go to each separate company, bank or firm to make comparisons or obtain services. You can do it all online. It doesn’t take the place of a personal financial advisor, but it makes it easier to get all the information you are looking for.

Worst Financial Advice Ever Given by Me

Last night the National Capital Financial Bloggers Association met, and we did what we normally do, swap stories and ideas about finances and the like (see the N.C.F.B.A. blog roll in the side bar for the sites authored by this group).

During these discussions the topic of time share condominiums came up and that led me to tell this story. The Worst Financial Advice I Ever Gave Most of you know that I am very unlikely to give you direct advice in any financial area, and this story is one of the reasons why.

My wife, myself and some friends went on a vacation to Florida (this was about 17 years ago). My Father In Law had told me about how if you go to a Timeshare Condominium sales pitch, you can get free tickets to some of the sites around Orlando, which sounded good to me (Free is always a good price). We found that at the Motel we were staying there was an entire courtesy desk filled with Timeshares offering this deal, so we signed up for a “sales demonstration”.

Off we went to this sales pitch, and it was hilarious,and surreal. I must mention one of my friends on this trip was Michael James on Money himself and his wife, so we were sure we weren’t going to buy. The salesman (who we nicknamed “Ray Don Bob Ron Don”, don’t ask why, but it was funny), tried all the sales pitches:

  • Slow playing us to see if the condo would sell itself (it didn’t)
  • Pandering to our wives about how there was little or no housework (they laughed)
  • Telling the men they could rent whenever they wanted (I asked if we could get to stay during Daytona 500 week, he said yes, I laughed)
  • How much money we’d save (we in turn figured out how much money they were making per building on the initial sale, and then how much they were going to make per year on their service fees).
  • Finally asking, “Would you buy this place for nothing?”, and then saying, “OK your price is between FREE and our selling price”, which always makes me chuckle.

I must admit that we played along and acted very much out of character (worrying my wife a great deal), but at the end, there was no sale, we got our free tickets and we left (our salesmen grumbling about how we were, “… too analytical…”. I was struck by how the people at the sales pitch “closing” room looked like deer in headlights while paying for their time share with their Credit Cards, a very disturbing site.

Fast forward a few months and a dear friend was off to Orlando with his new wife, so I told him the story about getting free tickets for a theme park and all you had to do was sit through a timeshare sales pitch. He said he’d think about doing that, and nothing much more was said.

My friend returned from Orlando a week later, picked me up to go to work and he told me all about his trip. I asked had he gone to the timeshare sales pitch, and he confirmed that he had. I then railed about how pathetic the sales pitch was, and what kind of an imbecile would buy one of those things, etc., etc., etc., for about 5 minutes.

Once I finished, my friend said in a very small voice, “We bought one…

The car ride to work was very quiet that morning.

From that day, I always shy away from giving anyone any financial advice directly, I will tell them what has worked for me, and let them decide for themselves.

Do You Know Where to Look For the Best Financial Advice?

If you spend any time trying to learn about the stock market, you know that there is a lot of advice out there. Turn on the financial news networks, read the books and articles, or talk to investing friends and you know that one thing is for sure: Even though financial advice is abundant, good financial advice is hard to find. Let’s look at how you can sift through this advice to find something that is useful.

First, don’t try to become an expert in all areas of investing. Unless you’re a full time investment professional, you probably have other responsibilities during your day. Pick areas that interest you and take some risk in those. For the rest, safe, dividend paying stocks held for the long term will be where big money is made.

Maybe you’re a technology junkie. You read all the magazines and once Apple puts out a new iPhone, it’s no surprise to you because you have read about it for 6 months. If that’s you, find a higher risk stock that could make you tons of money in the short term. If you know nothing about oil, let somebody that you trust and who has a consistent track record of success guide you in your diversification efforts.

Next, remember that while much of the media is committed to providing accurate information, they are first committed to gaining readers, watchers, and followers. Stories are geared towards holding your attention and for that reason, they are often over sensationalized. Listen and evaluate the financial media but be very careful about making investment choices solely based on these stories. Some media personalities will show a proven track record over time. If that is the case, stick with them. Read their blogs and focus on what they say. You don’t, and probably shouldn’t, read everything.

If you don’t believe you can sift through all of the financial advice coming your way, consider subscribing to a service like Action Alerts Plus where an expert like best selling author and CNBC commentator Jim Cramer is doing your research for you and all you have to do is buy and sell when he tells you to execute the trade. My secret is that I don’t have enough time to do all of my research so I let Action Alert Plus do it for me.

The world is on information overload and knowing which stocks are right for you is tough. Action Alerts Plus is one way to put confidence back in your investment choices.

The Future of Financial Advice and Its Essential Advantages

The future of financial advice (FOFA) is proposed regulatory framework. It is being brought in to improve the quality of financial advice and consumer outcomes as a result of the failures of financial firms in the late 2000s. It enables easier provision of simple advice which can be expected to make financial advice more affordable as well as increase public access and usability.

FOFA will see the removal of the accountant’s exemption. Presently accountants are able to provide advice on SMSFs under the exemption provided by regulation 7.1.29A of the Corporations Regulations 2001. Through this FOFA, the accountants can hold an Australian Financial Services License (AFSL) in their own right or being an authorised representative of a licensee.

Many in the financial industry will need to restructure their administrative systems in order to comply with the requirements and will incur transition costs as a result. But however the FOFA reforms will also create new opportunities. This will benefit consumer in enjoying results of the reforms which bring confidence in the industry, in turn, contributing to an increased demand for advice.

The benefits of FOFA are given below:

– Superannuation products and securities.
– Easy managed investment schemes as defined in the Corporations Regulations 2001,
– General and life insurance
– Basic deposit or banking products.
– Life risk insurance products.
– A benefit for a genuine education and training purpose that is relevant to the provision of financial product advice to retail clients.
– Information technology support or software that relates to the provision of financial product advice.
– Financial adviser’s interests will become aligned with client interests, leading to more client-focused advice and greater adviser engagement with clients.
– In this process product recommendations will not be influenced by commissions given to advisers by product issuers.
– Here clients will be less likely to suffer detriment as a result of excessive fee arrangements or sub-optimal investment strategies.
– A more competitive advice market and greater availability of advice.
– The financial planners will be discouraged from recommending imprudent investment strategies.
– In FOFA, a reduction in product fees which will result in significant savings for consumers and reduces the rogue advisers in the industry.

Consumers are the primary focus of FOFA and the Government believes that consumers will greatly benefit from structural change in the financial industry in a way that will outweigh the implementation costs to industry. The above all the quality of financial advice will improve, leaving consumers better equip to make decisions about their finances.

Financial Advice For The Spending Addicts

Everyone has those moments when you casually stroll around a mall, then all of a sudden, you stop in your tracks, things around you blur, and the world slowly swirls to focus on the big red sign in front of your favourite store: SALE. Everything with a percent-off tag suddenly looks so irresistible and you cannot just let them fall into other people’s hands. These are times when we lose control of our spending. It may seem harmless, but feeling this way at every visit to the mall puts your income at risk and can prevent you from reaching more important financial goals. You need a few financial advice to control your spending to save your money from going down the drain.

The first thing you need to do is to set priorities. Make a list of the things you need and make sure to spend money on them first before other things. If you plan on going to the grocery store, for example, bringing with you a shopping list and sticking to it saves time and money but not putting unnecessary items in your cart. Asking yourself questions like “Can I afford this?”, “Do I need this?”, or “Have I checked if it’s cheaper somewhere else?” can also stop you from buying on impulse.

Next is to spend within your means. One way to do this is by patronising the use of cash over credit cards. Only bring with you the approximate amount of cash you need and leave your credit cards at home. In this case, no matter how tempted you are to buy something beyond your budget, you have no choice but to walk away. Think of credit cards as your “debt cards” because you are spending the bank’s money every time you swipe. Make sure your debts are a low as possible so you can pay for them fully on time. Every month you fail to pay makes the value of your debt higher.

The third tip is to make a budget diary. This can help identify the trends in your spending and monitor your total expenses. Have a daily limit on the maximum amount you can spend. If you go beyond it, review your purchases and check where you might have bought something you didn’t really need.

Constantly spending more than what you earn can lead you to a financial storm. Before you know it, you no longer have savings for your financial goals and all of what you earn goes to paying your debts. If you reach this point, you can always seek the assistance of a financial adviser to pull you out of crisis.