Seminars slugging planners business
Wealth seminar operators are threatening the advice given by financial planners and making it difficult to provide advice in the future,Ipacdirector and financial planning commentator Paul Clitheroe says.
Speaking at a recent MelbourneFinancial Planning Association(FPA) chapter lunch, Clitheroe says the public is turning to wealth seminar operators for financial advice rather than using planners.
“People going to wealth seminars believe they are going for financial planning advice. These people (the seminar operators) are out-marketing us,” Clitheroe says.
“The public is having difficulty in distinguishing between an FPA member’s seminar and one of these wealth seminars. The only difference in their eyes is that ours are boring!”
He says the reason for the popularity of these seminars is that many promise better returns than financial planners can offer.
According to Clitheroe, seminar operators typically offer a free initial seminar to draw the crowds in and then offer the attraction of further advice at subsequent, fee-charging seminars. These fees vary from $75 up to $3000 and more.
He says one seminar in Sydney attracted 1200 people who all paid $3000 to attend and that the conversion rate for people attending seminars to sign up for another is about 10 per cent.
This was in turn having an effect on the business of a number of financial planners.
“There are so many seminars out there that they are affecting our industry. A lot of people who have been done-over by these scams are now advice-resistant,” he says.
Clitheroe says more than 30,000 Australians have bought property for more than twice what it is worth and many of the wealth seminars advise the public to buy property, usually heavily geared and at inflated prices.
Planners should attend one of these seminars to see what competition they were up against, Clitheroe says.
One planner in the audience said she had attended one of these seminars, which was designed to sell Queensland property. She asked the organiser how liquid the investment was and back came the reply: “All the properties have swimming pools!”
Clitheroe called on the FPA to tell consumers they can trust members of the association for good investment advice.
“As a group, we have to make a stand to get rid of the get-rich-quick schemes,” he says.
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