No matter where you are in life, partnering with a good financial adviser will help to set and achieve your financial goals.
But with over 15,000 advisers operating in Australia, finding someone with the right combination of trustworthiness and expertise can be tough.
Here are five tips to get things started and give yourself your best shot at finding a good financial adviser.
Where to start
Banks and super funds are also an option, just keep in mind the recommendations of these advisers can be limited to specific products and services.
Recommendations from friends can be another great way to find proven performers.
Know what you want
Before you make contact, outline what you think you want to get out of the financial advice you’re seeking. This will depend on where you’re at in life and what your goals are, but it pays to be specific. That way, you can find a good financial adviser for your specific circumstances.
Your needs might include things like retirement planning and improving your super balance, investing in property or shares, estate planning, insurance, maximising your tax return or even simple advice on drawing up a budget.
Also decide upfront whether you’re seeking one-off advice about a particular issue, or whether you want to establish an ongoing relationship to review and assess your financial plans.
WATCH: Finding a financial adviser with the combination of trustworthiness and expertise isn’t easy. James Panaretos of Adviser Ratings help us out.
Do your due diligence
You’re trusting an adviser with your financial future, so before making any commitments it’s crucial to have confidence in their abilities.
The first step is to check their website or ring round and ask for a copy of their Financial Services Guide. This will set out important information about their practice like:
- their services on offer
- how they charge (fixed and percentage-based fees as well as commissions)
- who owns the practice and if they’re aligned to a larger organisation like a bank (they probably are)
- their Australian Financial Services License
Also check their professional qualifications like whether they are a Certified Financial Planner. This shows a higher level of education and ethical standards in financial planning, so look for a CFP after the adviser’s name.
Ask key questions
Once you’re in a position to meet an adviser in person, treat the initial conversation like a job interview. Don’t be afraid to ask questions about their experience, specialties and if the practice is set up to cater to your specific needs. You might ask key questions that cover things like:
- What their specialty areas are and some example of client work
- What they charge and how you will pay
- How they monitor and manage investments
- What level of risk you’re comfortable with and how often that will be assessed
- How they’ll manage your money and consult you on decisions
- How they deal with complaints
- What happens if your particular financial adviser is away or leaves the business
- How you can end any agreement you have with them
And don’t agree to anything in the room, just get as much information as possible. Then take all the information home to do further research (including Googling the adviser and their practice).
Remember, trust your gut. Never feel obligated to get involved if things don’t feel right. A good financial adviser will be happy to answer any of your questions and will follow up if they don’t hear from you.
Check the fees
The key thing here is transparency. Any good financial adviser will be happy to run through in detail exactly what they’ll be charging and why.
Ask if they’ll be receiving commission payments, fixed advice fees, or a combination of both. How often will they charge these fees ?
And, if you don’t understand something, speak up. There are no dumb questions.