Choosing a financial adviser

Choosing a financial adviser is an important decision because a good financial adviser can set you up for life. It’s important to know what you’re looking for and to be prepared to shop around if you’re not happy.

Trusting your adviser

Even if you can tick every box ultimately you need to feel comfortable with your chosen financial adviser. It comes down to trust, and that's probably only something you can work out face-to-face.

As a guide we’ve put together some questions you should ask when you meet a financial adviser or planner for the first time. It’s not an exhaustive list but it is a solid start.

Licences, experience and qualifications 

What licences or authorisations do you and your firm hold? 

Your financial adviser should be licensed by the Australian Securities and Investments Commission (ASIC) or be authorised by someone who is licensed. The financial services offered are set out on the licence or on the financial adviser’s authorisation.

What is your role within the firm? 

Check the adviser is suitably qualified - the highest level is a Certified Financial PlannerTM (CFPTM). 

What are your qualifications? 

An adviser may have qualifications in finance, accounting, economics or financial planning (or similar subjects).  If the adviser is a member of the Financial Planning Association, you can check his or her qualifications on the Financial Planning Association of Australia website. The adviser's qualifications should support the types of financial services offered.

What experience do you have in giving financial advice? 

You should look for a level of experience you’re comfortable with. If your adviser has a long history of excellence in giving advice it’s probably a good sign. However, the length of time in the industry alone is not always an indication of success.

What area of financial advice do you specialise in? 

Some advisers may specialise in giving advice to large corporations or wholesale clients, individual wealth building, taxation, estate planning or retirement. 

Can you provide me with a Financial Services Guide? 

Your financial adviser should provide you with a Financial Services Guide. This guide identifies the adviser, describes the financial services they are authorised to provide, the kinds of financial products they can advise on or deal in, their fees and charges, and outlines complaint procedures if there is a dispute.

Fees and costs

What are your fees? 

Your financial adviser or planner should demonstrate absolute transparency over the fees you’ll be charged.Some typical fees could be for:

    • the initial consultation
    • establishing a portfolio
    • annual or regular reviews
    • amending a portfolio
    • fees from associates.

These should be set out in the Financial Services Guide and Statement of Advice, a document which outlines the advice given to you by the adviser. 

You should also make sure you are aware of any commissions and/or incentives paid to financial advisers for any investments you make through your adviser, or other associations or relationships that may influence their advice. These are usually also disclosed in the Financial Services Guide and Statement of Advice. You should also check the product disclosure statements issued by the entities providing the financial products or investments available or recommended by your adviser – these should contain details of any incentives or commissions paid to the adviser or planner for arranging investment in or purchase of a product.

Services

How do you choose the investments you recommend?

You should make sure your adviser will make recommendations based on your individual circumstances. You should receive an independent approach that is tailored to your specific financial needs rather than generic advice. Be wary of advisers who only recommend products which have very high levels of commission paid for arranging investment in those products.

What services am I entitled to receive?

Your adviser may include regular services such as reviews on the performance of your portfolio, client newsletters and seminars. Ideally, they will offer a follow-up to any initial advice and some ongoing services..

What is your source of research?

Your adviser should have access to comprehensive research facilities and up-to-date financial information..