Getting a better deal on fees
Moana and Ray decided they needed some advice on what and where to save for their retirement. Repaying debt had been their main objective in the last few years as they knew that was the first priority.
Gordon, a colleague of Moana’s, suggested that they see a financial adviser he had used. He said the adviser charged on an hourly basis so Moana and Ray would know roughly what the fees would be for the advice they received.
At their first meeting, Moana and Ray felt the adviser understood where they were in their financial lives and what they needed in order to reach their retirement saving objectives.
Moana and Ray were going to be serious savers and wanted to save half of Ray’s net income for the 15 years until their retirement. That would be about $20,000 a year. The adviser suggested he might be able to get a better deal on fees with a particular provider.
And so it turned out. The adviser happened to have a number of customers wanting to invest their savings in overseas shares. By putting them together, the adviser negotiated a 20% reduction in the normal fees charged by an overseas-based provider that suited Moana and Ray’s needs.
The adviser charged them for the time involved but Moana and Ray were more than happy about that. Without the combined approach with other customers, Moana and Ray wouldn’t have had enough savings to get access to the provider. And in just the first couple of months, the savings they would make from the reduced fees would cover the adviser’s costs.
