ING Direct

[grimlock]

Just did a bit of research:

All accounts have no minimum balance and unlimited transactions. Interest calculated daily and paid monthly.

ING - 6%
NAB - 6.1%
BankWest - 6.8% for 12 months then reverts to 6.25%.

 

[johnnyhoward]

Your friend is a moron, thank heavens you realised that. ING is a dutch based Multi-National, the "N" stands for "Netherlands".

I had the urge to say to him "You're a ****wit", believe me, but I resisted and let him live in ignorance One of the stupidest things I've heard in a conversation.

 

[Scratcher Gillespie]

Interesting comments on here re: Financial Planners.

I work in the industry, so I'll put in a couple of comments myself.

1. Bunsen, fair enough, you back your own judgement to do your investing yourself. That's fair enough, however, from my experience, the average man on the street (even clever people in their own field of expertise) has absolutely no idea about investment principles other than what he reads from magazines. This often results in disaster - the amount of clients i have seen that have bought at the peak of a bubble, get smashed and and sell, and be scared off only to come in at the peak of the next bubble is astounding. At the end of the day, for a minority of people who have the smarts and time to do their own investing, that is fine, for the majority who have neither, continual talk of "you will get ripped off by every financial advisor" simply results in people not going, and taking the advice of family/friends, which is generally worse than no advice at all.

2. Financial Planning is one of, if not the most regulated industry in Australia. Advisors need to show basis for advice, and that the client understands the advice. No doubt there are bad eggs in there, many left over from the days when financial planning was about risk insurance sales. These people are leaving the industry as they can't cope with the new compliance regime. The quality of advisors left is improving as a result.

3. It is possible to find advisors that work fee-for-service in the same way that accountants an lawyers do, charging on an hourly rate. These advisors don't get paid commission for product, only the hourly fee - taking the 'sales' aspect out of the process. At the end of the day you need to be expected to pay professional rates to get a professional service.

4. High yielding income properties. It's true most advisors will probably not recommend direct investment into residential property. Some do commercial, not all. What they will do, however, is recommend high yielding property trusts which make up a smaller proportion of the portfolio for diversification purposes. Most people are over-exposed to the residential property market with their principal residence, and going for a smaller holding via a listed/unlisted (my preference) property trust is a way to continue to gain exposure without the risk. If you think there is no risk with residential property, ask the people who bought in Sydney at the end of 2004/2005. Once taxes and costs are taken into account, returns from residential property are much lower than the "I bought at $200k, sold at $500k, $300k profit talkers"

At the end of the day, for the majority of people, it's more risky not seeing an advisor, than going to see one. Most people have an outrageously exagerrated concept of their knowledge of finance/tax and investement concepts, and also dont understand the concept of risk. If you don't want to use a FP, fine, but by telling everyone they are scammers and out to rip you off, apart from being untrue, can prevent people from seeking advice which results in hardship down the track.

 

[prep80]

Interesting comments about financial planners. Personally I think a good planner is worth his/her weight in gold but unfortunately for the average punter should steer away from them until the Fed Government cleans up the industry and removes the conflicts of interests with commission payments. The ASIC shadow shopper surveys on superannuation switching should send shivers up the spine of anyone looking for a planner.

I agree that most advisers don't advise direct investing in residential property and so they shouldn't because it is an unsophisticated strategy and hardly likely to produce decent returns over the long term compared to shares, commercial property and other structured investments. None of funds get into residential housing because the returns just are not there.

 

[bunsen burner]

Interesting comments about financial planners. Personally I think a good planner is worth his/her weight in gold

I'd agree, but where do you find one? How do you know who is who?

I agree that most advisers don't advise direct investing in residential property and so they shouldn't because it is an unsophisticated strategy

Why does an investment strategy have to be sophisticated?

and hardly likely to produce decent returns over the long term compared to shares, commercial property and other structured investments

Actually they're about similar.

I just got 12 times my money from a RRE investment over 5 years. That's 250% return pa.

That's a pretty ignorant statement.

None of funds get into residential housing because the returns just are not there.

Sure they do and sure they are.

Have you seen what the Perth residentual property market has done in the last 2 years? I'm not sure how you can sit there and claim they have low comparitive returns? Take your blinkers off.

 

[daddy_4_eyes]

Anyway the organisation are safe as houses as BB said, no worries there. What you want to do Ras is set up an automatic savings plan where you can set a certain amount to be transferred from your regular bank account monthly, weekly whatever - so don't ditch the ANZ account just yet - those accounts will have to do for daily banking.

I've got a savings account, but i have it set up backwards to what you mentioned. I have my pay going directly into my savings account, and then a monthly budget of $x transferred into my CBA account. This ensures that a) i have the same monthly budget to stick to, so if i get bonuses, payrise or overtime at work I don't have it in my bank account to be spent, b) you will be slugged with a dishonor fee if you overspend prior to the automatic transfer from b/acct to savings a/cct.

they're minor reasons, but i do find that it works better for me this way round.
Especially since i'm a compulsive spender, i need to force myself to save and I find this easier than just relying on myself to not spend.

 

[daddy_4_eyes]

It's almost the same thing. nThey will almost always tell you biased info. They are salepeople and will not discount you going through them even if you tell them you just want advice.

And I trust my own info and instinct over a unknown quantity financial adviser. Go to do your own investing and learn about what you want to invest in.

I agree with you to an extent. I work in financial planning so my views are going to be biased, but here goes.
Friends will often ask me "whats the best advice you can offer", like i've got some secret that will make them rich overnight. I always respond with "do your own research". Good financial planners are invaluable, and will take a lot of headaches away from managing your money. But a lot of them will also give you generic advise that they offer to all their other clients.

They are worth their fees if you have a complicated situation, such as retirement planning (social security, ETP & taxation, income streams, etc), debt reduction, salary packaging, and so on.

If its just simple saving or investing, just do your own research and go with that. If you have an understanding of risk & return you can't go wrong with managed funds. Shares, bonds, derivatives, etc are another matter altogether and most advisers won't help you there.

 

[iceman]

I use Members Equity for my Onlines Savings, 6.2%

http://membersequity.com.au/psave/onlinesavings.html

I find they're ok, are ING better however?

 

[bunsen burner]

I use Members Equity for my Onlines Savings, 6.2%

http://membersequity.com.au/psave/onlinesavings.html

I find they're ok, are ING better however?

There seems no difference except your one has a better rate. The only possible difference is how secure your money is if you bank goes under. Most likely it's underwritten.

 

[Papa G]

AMP has an Easysaver account which has a standard rate of 6.05 with the rate being 6.8 over the first 6 months. Works pretty much the same as the ING Direct account - all web based.

 

[crudbucket]

I had the urge to say to him "You're a ****wit", believe me, but I resisted and let him live in ignorance One of the stupidest things I've heard in a conversation.

Scary part is, we all know people like that

 

[Guido]

3. It is possible to find advisors that work fee-for-service in the same way that accountants an lawyers do, charging on an hourly rate. These advisors don't get paid commission for product, only the hourly fee

The only ones that I've got a lot of faith in. And yet in terms of market share, they're probably the least popular.

Take one of the best long term investment vehicles in Australia - the simple index tracking fund with ~0.4% costs and no commission. Across Australia, you'd be hard pressed to find a commission based financial planner recommending it.

Can cost anywhere up to $2K-$3K upfront, but if you think about it, if it's a fair chunk of money being invested it'll usually work out cheaper in the long run in comparison to what ongoing commissions will cost over 3, 5, 10 years. In the end, you're probably getting more value for money, and without the window for self interest - hopefully consumers wake up a bit and there'll be more of a trend towards full fee financial planning in the future and less of this sales based "free" appointment/consultation bollocks.

 

[Papa G]

The only ones that I've got a lot of faith in. And yet in terms of market share, they're probably the least popular.

Take one of the best long term investment vehicles in Australia - the simple index tracking fund with ~0.4% costs and no commission. Across Australia, you'd be hard pressed to find a commission based financial planner recommending it.

Can cost anywhere up to $2K-$3K upfront, but if you think about it, if it's a fair chunk of money being invested it'll usually work out cheaper in the long run in comparison to what ongoing commissions will cost over 3, 5, 10 years. In the end, you're probably getting more value for money, and without the window for self interest - hopefully consumers wake up a bit and there'll be more of a trend towards full fee financial planning in the future and less of this sales based "free" appointment/consultation bollocks.

Different strokes for different folks. A lot of people would balk at the idea of paying 2-3k for financial advice. Others simply could not afford it. Does this mean they don't need financial advice? Ofcourse they do - they are the ones mortgaged up to their eyeballs and have 3 screaming kids. Do they not deserve some sort of advice on on their wealth protection and maximisation? Commissions are just a way of paying for advice that does not come directly out of their own pocket. In fact you will probably find that the trail commission from those with big balances subsidises those with small balances.

 

[Lensen]

Does it have any conditions though? I find it hard to believe that one of our greedy Big 4 has better rates without strings.

I have both, it works the same as the ING Direct account except you have to have it linked to a NAB savings account, which have their own monthly fee depending on product.

 

[chooke]

The only ones that I've got a lot of faith in. And yet in terms of market share, they're probably the least popular.

Take one of the best long term investment vehicles in Australia - the simple index tracking fund with ~0.4% costs and no commission. Across Australia, you'd be hard pressed to find a commission based financial planner recommending it.

Can cost anywhere up to $2K-$3K upfront, but if you think about it, if it's a fair chunk of money being invested it'll usually work out cheaper in the long run in comparison to what ongoing commissions will cost over 3, 5, 10 years. In the end, you're probably getting more value for money, and without the window for self interest - hopefully consumers wake up a bit and there'll be more of a trend towards full fee financial planning in the future and less of this sales based "free" appointment/consultation bollocks.

Agreed - good post! The good news is that there already is a shift away from commission based planners as a result of the industy becoming more professional and ASIC disclosure policies which are allowing consumers to see the true long term cost of commission "advice" and conflicts of interest. I work in the strategy division of a major financial institution and we're betting that a majority of planners will be fee for service in 5 years time.

You gave one example of tracking funds which demonstrated how conflicts of interest leads to suboptimal advice. Other examples are how commissioned based planners favour retail super funds over industry funds even though both use similar underlying fund managers and mandates the only difference being the substantially lower costs of industry funds due to their not paying shareholder dividends and of course, commissions to advisers.

Other examples include some great investment management schemes like those offered by the Queensland Investment Corporation to retail customers. Again these types of funds typically don't get recommended by commissioned planners or get on their "approved product" lists because they don't pay commissions. These products do get recommended a lot by upfront fee planners though - hmmm makes one think.

 

[chooke]

Different strokes for different folks. A lot of people would balk at the idea of paying 2-3k for financial advice.

There's no need for good advice to cost that much. Our planning subsidiary charges on average $800 a client and that covers most people. dixon.com.au is typical of a professional financial advisory company in the marketplace (they are a highly regarded outfit) that only charges fee for service and rebates commissions. They charge $550 - $750. There is absolutely no need for most people to pay thousands for unbiased quality advice unless you need some very specialised services eg stockbroking services direct share investments or direct investment in overseas markets etc.

 

[Dandy_GO]

I've been in love with ING ever since they had that free $123 if you open up a savings account offer a couple of years back.
Been saving with them ever since and haven't had any problems.

 

[Papa G]

There's no need for good advice to cost that much. Our planning subsidiary charges on average $800 a client and that covers most people. dixon.com.au is typical of a professional financial advisory company in the marketplace (they are a highly regarded outfit) that only charges fee for service and rebates commissions. They charge $550 - $750. There is absolutely no need for most people to pay thousands for unbiased quality advice unless you need some very specialised services eg stockbroking services direct share investments or direct investment in overseas markets etc.

Do they take the trail or rebate that too? Do they charge for reviews? They have no bias to any product at all? Is this a non for profit outfit or a industry fund?

 

[daddy_4_eyes]

Agreed - good post! The good news is that there already is a shift away from commission based planners as a result of the industy becoming more professional and ASIC disclosure policies which are allowing consumers to see the true long term cost of commission "advice" and conflicts of interest. I work in the strategy division of a major financial institution and we're betting that a majority of planners will be fee for service in 5 years time.

You gave one example of tracking funds which demonstrated how conflicts of interest leads to suboptimal advice. Other examples are how commissioned based planners favour retail super funds over industry funds even though both use similar underlying fund managers and mandates the only difference being the substantially lower costs of industry funds due to their not paying shareholder dividends and of course, commissions to advisers.

Other examples include some great investment management schemes like those offered by the Queensland Investment Corporation to retail customers. Again these types of funds typically don't get recommended by commissioned planners or get on their "approved product" lists because they don't pay commissions. These products do get recommended a lot by upfront fee planners though - hmmm makes one think.

Very biased opinion. You either work for an industry fund or have watched too many of their "compare the pair" ads.

Industry funds have limited investment options. Super is your investment, you should have choice of which fund managers to invest your retirement savings into.
Industry funds have decreasing insurance that is generally more expensive than retail insurance. Unless you're a smoker, their insurance is inferior in every way to retail funds.
This crap about not paying commission & dividends to make their fees lower is mere manipulation of the truth. They spend millions on advertising. TV adds, radio adds, newspapers, sponsorships of sporting venues and sporting teams, etc. Where does the money for that come from? And while we're discussing that, if they're not for profit, why do they have a need to attract new clients? Surely they don't give a damn how many clients they have?



Fee for service means a lot of low networth clients wouldn't be able to afford advice. Retirees, low income earners, etc.
Where I work we offer clients a choice of fee for service or commission. Majority choose commission because they'd much rather pay the fee out of their product than out of their pocket.
There seems to be this ridiculous belief amongst people that planners take the standard 4-5% commission on every client. Thats rubbish. If we get a retiree with $500,000 in super that we'll use to set up an income stream with, can you imagine us charging our standard 4% commission? Of course not. We reduce the fee to match what our advice is worth, say 0.25%.

Some advisors are greedy and they create their own conflicts of interest through their actions. But these planners usually get found out by their own clients or worse yet by ASIC.

 

[chooke]

Very biased opinion. You either work for an industry fund or have watched too many of their "compare the pair" ads.

The truth sometimes does hurt. I don't have any association with superannuation funds but you miss the essential point of industry funds being no different to retail funds in terms of underlying fund managers and mandates. They are a lot cheaper though which is why they outperform retail funds. Don't take my view on this look at the rating agencies like morningstar.com.au, chantwest etc. Why are all bar 1 of the top performing super funds industy or public sector funds? - its not because they are smarter or have some inside information, it is purely the result of being lower cost. Why is it that most fee for service planners recommend industry or SMFS funds over retail why is it the reverse for commissioned planners? What did ASIC say about all this? What is the point of 100s of investment options when the main game is to build up a retirement nest egg - which is more relevant? It is really a no brainer.

As for advertising, yes like all commercial products industry funds advertise, unfortunately they still need to maintain scale and the advertising has resulted in their fees creeping up but it is still a heck of a lot cheaper than the average retail fund.

 

[chooke]

Do they take the trail or rebate that too? Do they charge for reviews? They have no bias to any product at all? Is this a non for profit outfit or a industry fund?

From what I know of this company, they rebate both up front and trails - their philosophy un trails in particular is that it compromises independent advice. They even have a service wehere they rebate trails even if you don't use their planning services. As a pty ltd company I'm sure Dixon is in the market to make a profit, but they do so from client service fees not from product commissions. You probably can get more detail by perusing their internet site. Btw Daryl Dixon, the guy who runs the outfit, is a well known financial planner and commentator. He often has a night segment on ABC talkback.

 

[nick_savo]

I am thinking about opening up an account with them to save for my first car, should i?

 

[bunsen burner]

I am thinking about opening up an account with them to save for my first car, should i?

yes. Either that or a similar account. If you browse through the thread you'll find there's other banks that apply similar products, some with slightly better fees.

This is what you want:

- 6% interest pa or higher
- no fees
- no min account balance
- no restriction on withdrawals - ie as many as you want when you want.
- Stable bank. Pretty sure all the banks mentioned are stable and don't present any risk.

 

[nick_savo]

Yeh, I am looking at putting away mayb 3-4 hundred dollars a month for about 18 months

 

[year of the roo]

Has anyone else heard about ING opening up an every day bank account in Australia? From what I've heard, some of the features could be very good. You get an ATM card, but there are no fees on withdrawing cash from other banks' machines. There were no fees at all IIRC, as well as a string of other impressive features that I cannot recall at present.

Not sure when to expect it though, but it does sound excellent.

As for these online savings accounts, I've been with a few of them for about 6 years now. I swap my money around to whoever has the best rate going. For example, ING had a promotion for 2 months over Christmas where there rate was 7%. It is now with BankWest who currently has the best rate on the market of 6.25%.