Getting a financial adviser is where the planning process begins for many people. For those who choose this route, it’s important to focus on finding the adviser that suits your needs.
To get the desired outcomes for your financial plan, asking the right questions of a financial adviser is a great place to start. All good advisers will be open to answering them, and it will help establish a relationship built on trust and transparency.
- Are you licensed to give financial planning advice?
As recommended by ASIC’s Smart Money only use advisers who hold an Australian Financial Services License (AFSL) or who are authorised by a business that holds an AFSL.
- What are your qualifications and experience?
There’s no such thing as one size fits all in financial advice. When appointing a financial adviser it’s important to ensure they specialise in the area relevant to your needs such as wealth and investing, insurance or retirement.
- What are the costs involved and what will I get in return?
Before entering any conversation around financial planning, make sure you understand the costs involved. Any financial planner can explain the planning process, the advice given and the fees and charges that come with it.
- Who owns the company and are you affiliated with product providers?
The major financial institutions own up to 80% of the financial planning industry1, so it’s important you are aware of such affiliations. A Financial Services Guide (FSG) provided by a licensed planner will give disclosure of company ownership, products, services, fees and charges related to services. It’s worth noting that some adviser practices are restricted to advising on 3-4 insurers instead of the whole market.
- What financial products are suitable to my needs?
Investment types and levels depend on many things, but should always be assessed on the level of risk that suits your circumstances. The new Future of Financial Advice (FOFA) legislation means financial advisers are legally bound to provide advice in the best interests of the customer, not the interests of the business, institution or adviser themselves.
- Can you please explain that?
The most important part of the financial planning process is that you fully understand the decisions being made with your money and future financial security.