How To Choose A Financial Planner

Find Local Advisers

Once you have identified your financial advice needs, it's time to find an adviser who offers the services you are looking for. Your friends, family or work colleagues may be able to recommend a suitable adviser, or you can ask your super fund, lawyer or accountant for their suggestions.

Industry associations

Industry associations usually have 'find an adviser' services that will help you find an adviser in your area. Most associations require their members to participate in ongoing training and have a code of conduct for members to follow and a mechanism for handling complaints.
Here are some links to a few professional associations to get you started:
The Financial Planning Association

The Financial Planning Association

They provide a Find a planner service.
The Financial Planning Association

The Association of Financial Advisers

They have a Find an adviser service.

Check that your adviser is licensed to provide the type of advice you want.

Certificate

Financial advisers register

The register tells you:
  • The adviser's qualifications, experience and employment history
  • What product areas the adviser can provide advice about (check that these are the areas you're looking for)
  • Whether the adviser is a member of any professional bodies or industry associations that are relevant to providing financial services
  • Whether the adviser has been the subject of disciplinary action by ASIC
  • The name and number of the Australian Financial Services (AFS) Licence holder who employs or authorises the financial adviser to provide advice
  • details about who owns or controls the licence holder.
If the adviser is not operating under a licence, do not deal with them - they are breaking the law, and you will have little protection if things go wrong.
Certificate

Further research

Most industry associations also have information on their website about their members. You can also search the internet to find out more about the adviser or the business they work for.

Get A Financial Services Guide

Read the financial services guide (FSG) of any financial advisers you are seriously considering. You can find the guide on their website or ask them for a copy.

The guide will tell you:
  • What services they offer
  • How they charge and whether they receive any additional payments or benefits
  • Who owns the company the adviser works for
  • If they have links to product providers (many advisers are linked to banks, fund managers and life insurance companies and this can affect the services and products offered)
  • Their licence number

Check The Adviser's Qualifications And Experience

Qualifications

A financial adviser can be qualified to give advice after meeting only minimum training requirements. To increase your chances of getting advice that is right for you, look for an adviser who also has a diploma, an advanced diploma or degree qualification in a relevant discipline such as finance, economics, accounting or financial planning. A degree is a higher level qualification than a diploma or an advanced diploma.

Experience

Ask the adviser about their typical clients. This will help you judge whether they are experienced in dealing with people who have similar issues and goals to you. For example, are the adviser's other clients planning for retirement or are they young families wanting to save for their children's education? The amount of experience an adviser has is also relevant. For example, an adviser that has recently graduated may be highly qualified; however, they may not be as experienced as an older adviser with fewer qualifications.

Financial products

Make sure the adviser can provide advice about the financial products you currently have. This is critical when it comes to super, as the adviser may not be able to give you advice about your current super fund if it's not on their 'approved product list'. Be careful of advisers who only sell one investment product or solution as this may mean the advice doesn't meet your specific needs and objectives. Use ASIC's financial advisers register to see what product areas an adviser can provide advice about.

Smart tip

When you speak with an adviser, make sure they focus on the services and strategies they can offer you, rather than the products they can sell you.

Ongoing professional development

Like other professionals, it's important for an adviser to keep up with industry or regulatory changes that might affect their clients. An adviser should participate in regular training activities such as courses or seminars run by universities, industry associations, professional bodies or registered training organisation.

Industry association membership

Also check that the adviser is a member of an industry association and/or a professional body. Most associations require members to participate in ongoing training, have a code of conduct for members to follow and a mechanism for handling complaints.

Check the financial adviser's fees

Ask the adviser for an estimate of the cost of the advice. Even a rough estimate will give you an idea of what you'll be paying.

Case study: Mike and Anne choose the wrong adviser

Mike and Anne want to get some financial advice before they start investing.

At the first meeting, the adviser gives them a Financial Services Guide (FSG), which outlines the areas in which he is qualified and authorised to provide financial advice. Mike and Anne are encouraged to take the FSG away and read it in their own time; however, they never review it because they think the adviser seemed to understand what they wanted.

The adviser meets with Mike and Anne 3 weeks later and recommends they roll over their super into a new fund and change to a life insurance policy through the new super fund.

Mike and Anne are disappointed that the adviser doesn't speak to them about starting a share portfolio or suggesting other ways to invest their surplus cash.

The adviser reminds Mike and Anne that the FSG he gave them outlines his qualifications, and that his authorisations are limited to providing advice on super products and insurance. The adviser also explains that he's not able to provide advice on investing in shares. Mike and Anne walk away disappointed that their main objectives are not covered in the advice.

Mike and Anne could have identified the limitations of the adviser's qualifications and authority to provide advice by:

  • Checking ASIC's financial advisers register
  • Reviewing the FSG in detail
  • Asking the adviser to explain the areas in which he can provide financial advice and the products he specialises in
  • Asking the adviser about their typical clients
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