👋Hi! My name's Kyle Frost.
I'm the owner of Millennial Independent Advice and maybe your financial adviser :)
Full disclosure: my Zoom waves good bye are especially awkward.
I grew up in Newcastle (NSW) and always obsessed with numbers and finance, I finished my finance under-grad degree in 2013.
In 2012 I saw the below video on 7:30 (summary, being independent and taking steps to remove conflicts improves advice) and have seen independence as a non-negotiable ever since.
I started working in financial services in 2013 whilst finishing my degree at an accountancy firm in Gosford (NSW) where I worked until 2016 learning the ropes and in 2015 I also finished my post-grad degree.
In 2016 with motivation from my girlfriend Amy who was working in Sydney, we moved down the freeway where I worked at a few awesome advice firms before starting my own business wanting to work with people being ignored by the financial services industry and not do things just because it was the industry norm.
From time to time I'm not thinking about finance and when I'm not I'm usually either: playing Connect 4, backgammon or bingeing a series with Amy (hopefully true crime), playing sport (tennis, cricket or soccer), watching NRL (go Knight's) or thinking where I can go skiing next.
Why the current advice model needs work
The finance industry does few things better than quote investment legends Warren Buffett and his partner Charlie Munger.
Weirdly I've never heard financial advisers use some of my favourites:
When a person with money meets a person with experience, the one with experience ends up with the money and the one with money leaves with experience.
What witch doctor has ever achieved fame and fortune by simply advising "take two aspirins"?
Show me the incentive and I will show you the outcome.
Don't ask the barber whether you need a haircut.
I think I’ve been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I’ve underestimated it.
The financial advice industry makes things appear more complex than they need to be and still has many conflicts where the incentives of the adviser don't lead to great advice. The Royal Commission in 2018 brought awareness to many issues and the biggest issues I'm passionate to see changed are:
Financial advisers recommending themselves as the ongoing investment manager and creating future revenue for themselves.
Commissions and fees based on a % of assets managed (commissions in disguise).
Alignment with product providers like banks, super funds and insurance companies.
Advisers receiving or paying referral fees.
Delivering overly complex solutions to justify their services.
Advisers also being mortgage brokers (who receive commissions) or have alignment with mortgage brokers.
Using clients "goals" and "values" to sell to them and confusing financial advice with life coaching.
I hope stricter regulations fix a lot of these issues for consumers in the future as well as a move to independence which fixes most. Nothing, however, can make more change than consumers demanding these characteristics from their adviser :)
I love finance and John Oliver so the below video is awesome too and crazily relevant to the Australian industry, IMO.