Is 'general advice' really advice at all?
The term ‘general advice’ gets used a lot in disclaimers in the finance industry to indemnify the seller from providing a product or service that may not be in your best interest. The Financial Planning Association has called for this term to be changed to ‘general information’ in order to remove some of the confusion around what consumers are actually receiving. At the moment when the term ‘general advice’ is being used, there is actually no advice at all being provided, this means that the product or service may not be the best thing for you and the person selling it probably won’t tell you if it’s not.
A financial adviser provides advice taking into consideration their client’s entire financial situation. This approach is going to ensure that all aspects of your finances are working cohesively to get the best outcome possible. Without considering the entire situation, it is easy to overlook certain aspects which may be the difference between whether the desired outcome is going to be achieved by the advice. A financial adviser is going to put all of the pieces together to form a plan to achieve your goals, and has the knowledge and skills to be able to identify any foreseeable risks and disadvantages to their strategy, and has the obligation to make the client aware of these.
A company who’s main goal is to sell a product as ‘general advice’ is not considering whether their product is in the client’s best interest, and it would be very unlikely for them to refuse a sale if that was the case. The Financial Planning Association’s push to change the disclaimer from ‘general advice’ to ‘general information’ is a step towards providing some clarity around how much (or little) assistance you are going to receive to make financial decisions.
I think this just highlights the importance of having a financial advocate on your team. Someone who is always going to be there to answer questions and provide an unbiased opinion on what is in your best interest, and if whatever product or strategy you are considering is going to fit into your overall plan to achieve the goals you have set for yourself. If you would like to see if we would be a good fit for your needs, I welcome you to get on touch on 0423 313 486 or Kate@solacewealth.com.au.
