A couple of questions for your adviser

With all the drama currently surrounding the Royal Commission, banks, financial institutions and advisers are heavily in the spotlight.

Whether you have an adviser, or you want to start looking, what are a couple of questions you should ask before you get started?  Remember, you’re looking for the best person to fit your needs.

1  What is your background? What formal qualifications do you hold?

In dealing with any professional, it is important to have an understanding of their professional background and qualifications.  Doctors and Lawyers usually have their certificates proudly displayed on the wall.  But how can you be sure?

All financial advisers in Australia must meet minimum educational requirements and these standards are constantly being raised, soon to a degree level minimum as the Industry works toward becoming a Profession.  That said, there’s already many professionals working in the financial advice space.

And, the more qualified and experienced your adviser is, the better for you. Your Adviser should also show a commitment to continual ongoing education. When looking at an adviser’s qualifications, consider their formal education and their life and business experience:

  • What degrees, diplomas or post-graduate qualifications do they have? Do they hold a basic diploma or a Masters Degree?
  • Do they have professional designations that have been earned or paid for?
  • What specialist accreditations do they hold? e.g. life risk specialist, SMSF specialist, estate-planning or aged-care specialist etc.
  • What is their experience as a financial adviser?  How many years have they been advising or in the financial services space?  And how long do they plan on continuing to give advice?
  • Are they a member of any industry associations or professional bodies that adhere to a code of ethics, such as the Association of Financial Advisers or the Financial Planning Association?

If you think someone might be fudging the certificate on the wall, you can always check an adviser’s qualifications through the financial advisers register on the ASIC MoneySmart Website.

2 What is the scope of your advice?  What can you advise me on?

In a similar way to lawyers or medical professionals, not all financial advisers provide the same services.  Some offer holistic advice, covering everything, others offer advice in limited areas such as insurance or superannuation. It is important to ask a potential adviser if they are capable of providing all of the services you require. It’s no surprise that an adviser that suits one individual may not suit another.  These areas should all be explained on the Adviser Profile that accompanies their Financial Services Guide.

Some advisers may not have the experience or qualifications to advise on a particular specialist areas that you require, such as self-managed superannuation funds, direct shares or gearing and margin loans.

Have a think about your long-term needs and objectives and make sure the adviser you choose can meet them all.

This is a person you will be trusting to shape your financial future and have a long-term relationship with.  Also ask your adviser what actions they will take to implement, update and maintain any plan you devise together.  How often will you meet with your adviser? Do you have access to a team of experts or just the adviser?  If your adviser is on leave or uncontactable, who can they turn to?

 

These are just a couple of questions at the start of any conversation you can have.  And the beauty of the internet means that you can even do some snooping before you meet to qualify your potential adviser before you arrive.

There’s lots more to cover, like fees and charges, whether the adviser is ‘aligned’ or ‘non-aligned’ with a large institution or how long they’d like to keep practicing for…  But, you might just get a feel of whether or not they’re the one for you from these couple of questions.

 

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