Never Seek Advice Where the Palm Trees Grow (And Other Myths)

Palm trees + white shoes = big trouble?

Look, you'd think there's some evidence for this because the warmer climes get a bad rap when it comes to money.

For a start, you should be wary of advice that suggests you should hide your loot in the Cayman Islands (sorry Malcolm).

Closer to home, Queensland's Gold Coast is a well-known shark sanctuary - home for bottom feeders like Aboriginal Community Funeral Plans.

But here's the problem - north of the palm tree line (which I'm guessing is about Byron) it's not all shonks, sharks and charlatans. There are many capable, honest financial advisors who prefer wearing shorts to puffer jackets.

Also, I live a stone's throw from Chris Skase's old digs, plus I've got palm trees in my back yard.

So let's bust that myth, particularly the idea that you need to head away from the sunshine to get decent financial advice.

Because further south in Sydney is where you'll find fringe dwellers like Squirrel Superannuation and hapless Sam Henderson of $500K fame.

Sam Henderson. Suggested LinkedIn profile - seeking new career opportunities

Trust me. I'm a Certified Financial Planner

According to the Financial Planning Association (FPA), Certified Financial Planner status is the 'gold standard in financial planning'.

I've got one of those certificates somewhere. I've also got a 'Best Behaved Certificate' awarded by Mrs Beresford, my Grade 1 teacher. I got that one for not being disruptive for nearly an hour. I value that one more (and it was harder to get than my CFP).

If you read the 'pick an advisor' tips published by the FPA you should stick with one of their members. A CFP like Sam Henderson.

Truth is, the FPA exists to look after members, not consumers. Oh, and to put on fancy conferences in exotic locations (with palm trees).

My point? If you follow the FPA's guidelines for choosing an advisor, you'll end up talking to an FPA member. Which guarantees you zilch.

You're safer with a big company

Three letters: AMP. Let's move on.

Where do you turn then?

There's no easy way of finding a good advisor. What you can do is try to filter out the bad ones.

To help you I've put together a handy list of questions you can ask a potential advisor (or if you're game, your current advisor):

What's the point of all these questions?  It's certainly not going to tell you whether the person's any good at their job or not.

What it does is this - it flags problem areas. If your potential advisor last worked selling time share apartments in Queensland, there's something to think about right there.

If you're told you'll need a 120-page Statement of Advice for compliance reasons, then I'd suggest your being sized up as an easy target.

The Naked Takeaway

Next week I'll explain what answers you're looking for, and tell you how to cut through the sales jargon.

After that, it's on to how to read a Statement of Advice.

Until then, happy and safe investing!

Bankers behaving badly? Nah, this is far worse.

Last week, a queue of angry farmers lined up at the Banking Royal Commission. It was their day in Court, if you like.

The media loved it -- hard working people thrown off their land thanks to greedy bankers. According to one news outlet, ANZ lacked empathy for demanding repayment from one couple who'd thrown the timber plantation dice (and lost), owing millions.

Before that, we heard all about crook financial planners, including the contemptible Sam Henderson who tried to blame his staff for crap advice that would have lost his client $500,000.

Look, I've got no tolerance for financial advisers like Henderson. I'm not a fan of banks who screw people when they're down.

But the tree farming couple, like a lot of people who fronted the RC had options. Most were wealthy and had access to legal and accounting advice. Very few were prepared to accept any personal responsibility for their situation (hint - if you're borrowing millions of dollars, it's smart to do your homework).

So while I've got some empathy for a farmer who's lost money, I've got a lot more for an indigenous Australian who's been fucked over by a white-shoed charlatan from the Gold Coast.

This week, the Royal Commission's been looking at the people who provide 'financial services' to people in remote aboriginal communities.

Here's a sample of what's been uncovered:

  • People who charge ATM withdrawal fees of $40 (with a $200 minimum withdrawal). Don't like it? Tough. There's another ATM 500km down the road.
  • Car salesmen who ship a truckload of rusted out shitbox cars to a remote community, then flog them using easy finance (at 48%) and useless insurance. A year later, they return and repossess the cars for late payments, shipping them to another community. Rinse and repeat.
  • Super funds who refuse to pay out because the member can't produce 100 points of ID. Look, when I moved to Brisbane from Melbourne I couldn't convince the Transport Department I was real. So imagine trying to lodge a claim when you don't have a birth certificate, don't have great English and live 2,000 from a capital city.
But it's the weasels from the Aboriginal Community Funeral Plan (from the Gold Coast of course) who take the cake.

First, it's not an Aboriginal organisation. Second, their only involvement with community is ripping money out of it. And according to evidence, they employ 'dark skinned' staff to con people into believing they are an indigenous organisation.

Funeral insurance is virtually worthless at the best of times -- and when sold without proper disclosure to people without regular income who can't read the fine print, then I reckon it's organised theft.

Yet these people have been allowed to sell funeral insurance door-to-door. For decades.

The really sad thing is most of these practices are probably legal, and people have been turning a blind eye to them for years. The RC will put an end to some of it, but that's too late for thousands of indigenous people.

There's an old saying that you can measure a community by how it treats its old folk.

I'd go a step further, and say we should measure our maturity as a nation by how we treat Australia's first people.

If the last two days of Royal Commission hearings are a guide, we're failing.

Dodgy Financial Advice, Explained Using Dogs

Revelation number one from the Royal Commission into Bankers Behaving Badly wasn't that AMP is run by a pack of crooks – we already knew that.

Instead, it’s been the discovery of a new Superhero: Rowena Orr QC.

All week, Ms Orr’s been dissecting a string of lying, conniving financiers and shown that the financial planning industry is not much more than a moneymaking scam (but not for clients).

So far, everything from the dodgy (charging your dead uncle advice fees) to the outright criminal (buying a penthouse with your clients’ money) has been exposed.

Actually, there’s so much crap advice being uncovered it’s hard to know where to begin. I’ll start with the five biggest types of scammers exposed so far, explained using dogs.

The Poodle

The poodle likes to be Best in Show. It’s all about appearance, after all. You can spot a financial planning poodle by the big ego, the big hair and the BMW. Oh, and they like to be seen on television. Yes Sam Henderson, I’m talking about you.

Poodles don’t necessarily need the right qualifications. I mean, Sam Henderson lied about his, and nobody bothered to check. He says he also didn’t bother to check the work of his paraplanner, which would have left a client $500,000 out of pocket.

Never let a poodle near your money.

The Kelpie

Kelpies are excellent at one thing – rounding up lots of sheep and herding them into a paddock. 

It’s the same with the financial planning kelpie. Doesn’t matter what your needs are, you’ll end up in the same investment paddock as all the other clients. If you’re seeing an accountant, then you’ll end up with an SMSF. An AMP kelpie, you’ll end up in an AMP platform.  People rarely question this. Baaaa.

Never let a kelpie near your money. Are you seeing a theme here?

The Boxer

Anybody ever owned a boxer? Lovely dogs. Dumb as a box of hammers though.

Boxers can be the most dangerous financial planners of all because they’re more likely to cock things up through good old-fashioned incompetence. If it’s your money we’re talking about, that’s bad.

I once knew a boxer who was trying to get Certified Financial Planner certification (more on the Financial Planning Association in a moment). He failed the exam six times in a row. I think they gave it to him on the seventh try out of pity.

The point I’m making is that a lot of boxers arrive in financial planning through sales – cars, insurance, phone plans, whatever.  That’s not necessarily the background you want when you’re trusting somebody with all your cash.

 The Labrador

Everybody loves labradors. Good natured, safe around kids and wouldn’t hurt a fly. Don’t trust them anyway.

That’s because labradors are only affectionate in the hope you’ll give them food. You're their meal ticket.

Your friendly local financial planner is probably a labrador. Chances are you get a Christmas card every year, a phone call around your birthday and bugger-all else. Meanwhile, he’s eating you out of house and home by charging you entry fees, exit fees, ongoing advice fees and platform fees. He’s getting fat and lazy on your money.

CBA and AMP are famous breeders of labradors.

The Jack Russell Terrier

Sneaky little buggers, Jack Russells. They can steal something from under your nose without you noticing it.

Jack Russell financial planners make the news regularly. They are the thieves, the fraudsters and the outright conmen (not many women financial planners rip clients off). Fortunately, they’re far outnumbered by the other breeds.

Who let the dogs out?

Some financial planners have suggested I shouldn’t judge the industry by the actions of a few bad eggs.

So who is to blame for misdeeds uncovered by Rowena Orr QC?  The banks? AMP?  The  Financial Planning Association? ASIC?

I’d go further. I’d say everyone in the entire financial planning industry has to share the blame.

I’m including myself in that –  I’m embarrassed by this mess and ashamed I didn’t do more to put a halt to it.  I should have done more to expose the rorts and unethical practices. So should anybody who claims to be a professional adviser.

The good news? There will be a big cleanout. AMP is stuffed, the banks won’t be offering dodgy financial advice soon, and the Financial Planning Association (which has opposed every reform for decades) will be gone.

The Naked Takeaway

I’ll be writing a lot more about this and want to hear your story. If you’ve been bitten by one of the dogs mentioned, please email or do the social media message thingy.

If you’re an aggrieved financial planner, then toughen up. You’ve got a rocky road ahead of you. If you seriously think your advice proposition will stand up to scrutiny, then shoot me your details. Eventually, I plan to  publish a list of Naked Approved financial planners. If you pass my vet test, you could be on it.

The Naked Guide to Buying a Car

I came across a new word today. Greysplaining.

It's when old farts lecture young people about what they're doing wrong.

Case in point: Most Millennials are scared shitless of ordering a latte in public, lest they cop a lecture from some octogenarian about poor financial choices.

God help 'em if they try and order breakfast somewhere.

Then today, a greysplainer was in the news warning youngsters - including those in their twenties - against buying a car.

Back in my day...

The old codger (apparently a respected financial columnist) said something like this:

1. Cars cost money. Young people shouldn't have any money.

2. When I was at university, I walked 11 miles each way. Today's young people are soft.

3. If you calculate the costs of running a car, then invest it at 9.6% until you're my age, you'll have $3.4 billion to pay for your dentures.

I'm taking a completely different view. I think cars are great for young people.

Cars give you freedom and independence. You can learn basic mechanical skills and visit places your parents never dreamed of. You can engage romantically with humans you find attractive without parents listening from the next room.

Best of all, cars are cheaper than they've ever been.

If pushed, Greysplainers will admit that some people actually need a car.

Then they'll suggest you save up your coin, and pay cash for something sensible, like a Toyota Corolla (with matching beige cardigan).

I'm not one of them.

Like a lot of Australians, I like cars. I enjoy driving them. I love long road trips, even though my passengers might not.

One day, I hope to be completely irresponsible and buy a Mercedes C63 AMG, even though it has the same basic function as a Corolla.

So with that in mind, here are my 8 handy tips for buying a car.

1. Don't buy a Jeep. Ever.

Got that? Good. Let's keep moving.

2. Be careful who you listen to.

Everybody's got an opinion. When it comes to cars, people have strong opinions.

Your neighbour Dave, a Ford man, will tell you to buy.... Yep, you guessed it.

If you go to a VW dealer, you won't hear this: "Truth is, VW has a terrible reputation for reliability. You should probably go somewhere else".

And as I've already said, sensible people will tell you to buy a Toyota (just don't mention the airbag).

My suggestion? Get online and read reviews at places like and

3. Prepare for Armageddon

Planning on starting a family? Thinking about buying a kid-friendly car? This is for you.

Take your current car, and leave an ice cream - any ice cream - on the back seat. Then spill a bottle of strawberry milk on the carpet. Leave it for a couple of weeks.

Hide an uneaten school lunch (bonus points if it contains fish) under the driver's seat.

Finally, add the finishing touches by running a metal garden rake down both sides of the car.

Perfect. That's what your car will be like after your little angels have finished their work.

So don't waste money on a good car -- buy something cheap and bulletproof that you can hose out at the car wash. Commodores and Falcons were born for this.

You'll know when it's safe to upgrade. It's when your kids are too embarrassed to travel with you.

4. Buy what you need, not what you want

Do you fancy yourself picking up your Tinder date in a new Audi RS4, but you still live with mum and dad and only earn $35,000?

Get over it.

5. The 12 month trap

There's this theory that buying a 12 month old car is the way to go. Something about somebody else copping the 30% depreciation on new cars.

I'm not buying it. That's because a lot of cars that age are repossessions, write-offs or rotten lemons. Either that, or it's a fleet car that's had the buggery thrashed out of it.

If you want newish and shinyish, look for something that's been traded in after three or four years. Something that hasn't been owned by a Uber part-timer.

6. Love me tender

Never, ever, ever buy a car without a service history. If you own one already, at least change the oil regularly.

The best bargains can be older European marques with complete log book histories. Sometimes, you can pick up a car for less than the cost of the last service. Case in point - my ageing Mercedes has 290,000 on the clock, but thanks to regular servicing by the wealthy former owners it's still going strong.

7. Do the numbers

Okay, deep breaths, because this is where we get serious.

Doesn't matter whether you're buying a Toyota or a Tesla, the important thing is the total cost of ownership.

That includes repayments (if you've borrowed money), rego, insurance, fuel, tolls; the lot.

Most State motoring organisations will have a nifty calculator on their website.

Once you've done that, sit back and have a think. Because owning a car is bloody expensive -- even the cheap ones. 

As I said right at the beginning, I think cars are great. But there's no point going broke just to own one.

8. A car is not an investment

Cars are appliances. They lose value with horrific speed, and these days, anything older than about seven years is pretty much worthless. So don't get all excited about resale value.

Of course there are exceptions. Take this yellow car, for example.

Once, I owned one very similar. An ill-handling, fuel-guzzling pig of a thing. I was glad to be rid of it -- for $3,600. I don't want to talk about what it would be worth now. A lot, I suspect.

Here's the problem though -- nobody can tell you which cars will become valuable in the future, and which ones should be sold for scrap. So if you've got a VN Commodore hidden in the garage, you're probably one of thousands. Prepare for disappointment.

Key point: Your life will be easier if you assume that your car is worthless, whatever you paid for it.

The Naked Takeaway

If after all that you still think you need a car (don't rule out a bicycle though) and you can afford one, then go and buy one.

I wouldn't be paying too much though. And new cars? Nah...

Think about this: Within a few years (I'm guessing five), our cities will be ruled by not just electric, but autonomous cars.

Which means your shiny (and supposedly safe) Toyota will be completely, utterly obsolete. And worthless.