Leading financial advisor warns Aussies: Bank fees costing you a lot of money

Leading Australian financial advisor, Alex Jamieson, is warning Australians to take more interest in their bank accounts, specifically the fees and charges that are being deducted from their accounts by financial institutions and the diminishing levels of interest being provided.  
 

Jamieson is a highly respected financial advisor, financial planning thought leader and founder of AJ Financial Planning.
 

"Like superannuation and other types of financial facilities, bank accounts should never be a set and forget activity.  The accounts should be monitored regularly and importantly, a deep-dive review should occur every six to 12 months," Jamieson said. 
 

Jamieson emphasised that people open up bank accounts because they include minimal fees and certain rates of interest at the time. Unfortunately, over time the financial institution changes the terms and often this involves increased fees and reduced interest.
 

"Many people don't bother to check the changes or if they do, they consider the changes too small to matter. Unfortunately, over a period of time, increased fees can add up. In addition, a reduction in interest means that people are not getting decent returns on their money. Your money should work for you while it is sitting idle and this is what interest does," Jamieson said.
 

Many Australians don't realise how much they're losing to bank fees and charges. With costs increasing, it's crucial to understand these expenses and take proactive steps to minimise them.
 

Jamieson outlines tips for Australians on how to minimise bank costs.
 

Compare bank accounts

"Do you due diligence and make the effort to compare bank accounts across the market space. You will be surprised at much they can vary," Jamieson said.
 

"Look for accounts with no or low monthly fees and unlimited free transactions."
 

Switch to fee-free ATMs

"Banks are making it more expensive for people to use cash. They want to push you to online banking because it reduces operational costs for their organisations. The issue is that many people including older people still use cash," Jamieson said.
 

"The other issue for people is the increasing rate of scams. To avoid cash fees, switch to banks and accounts that offer fee-free ATMs. Use ATMs within your bank's network or consider cashless payment options."

Negotiate with your bank

"Depending on how much business you do with your bank, they may be prepared to negotiate. If not, look for a bank that will. Request fee waivers or discounts, particularly if you are a loyal customer or a potential customer bringing a good amount of business to them," Jamieson said.
 

"Many smaller community focused financial organisations offer excellent deals on bank accounts."
 

Monitor your accounts closely

"Monitor all of your bank accounts closely. Review monthly statements to identify and avoid unnecessary charges. Don't just accept new bank account terms which are often dressed up as nice new shiny names with great options that ultimately remove important features," Jamieson said.
 

"Every time the bank says it is offering you something new and exciting, be alert. Banks seldom do anything for the benefit of customers. They work largely for their shareholders."
 

Opt for online banking

"Most of the world is moving to digital. If you need a prompt to do this, cash fees may be the final push you need. Many online banks offer lower fees and higher interest rates on savings accounts," Jamieson said.
 

Set up alerts

"Try to be more aware of what is happening with your bank accounts. Use mobile apps to get notified before overdrawing or hitting transaction limits. This will help you avoid unnecessary fees and charges," Jamieson said.
 

Consolidate accounts

"Many people have more bank accounts than they really need. Reduce complexity by holding fewer accounts, minimising fees and improving financial control," Jamieson said.
 

Leverage cashback and rewards

"Financial institutions are always looking for ways to lure in new business and often they do this with incentives and rewards. Choose accounts offering cashback on purchases or rewards to offset fees," Jamieson said.
 

Jamieson explained that by understanding the fees and taking proactive steps, Australians can turn their bank accounts from a cost centre into a financial asset.
 

About Alex Jamieson
 
Alex Jamieson is the founder of Melbourne-based advisory firm, AJ Financial Planning. With a firm belief in responsible investing, Alex crafts investment portfolios for clients that not only meet their financial objectives but are also sustainable and match their ethical values.
 
A highly respected financial advisor, Alex is considered one of the country's leading experts on all matters financial planning, investing and retirement.
 
http://www.ajfp.com.au/