Want professional help to achieve your financial goals? AFA president Deborah Kent shows you how to choose the right partner.
If you are reading this, congratulations – you are taking the important first step to securing your financial future. Choosing the right financial adviser is a critical part of that decision. Your financial adviser should be someone with whom you can build a long-term relationship. Someone you trust to hold your hand through the ups and downs that life throws at you.In a nutshell – someone you can count on.
There are any number of myths around seeking advice. My colleague, Melinda Houghton of Aon Hewitt Financial Advice, writes on the AFA website: “There is still a legacy of thinking that if you want to work with a financial planner, you need to be rich first. Kind of like cleaning up your house before the house cleaner comes!”
How do you go about finding the right person to form such an important partnership?
You need to do some research. Try this checklist of 10 things to consider:
1. Referrals from friends or professionals, such as accountants and lawyers, are a great place to start, as they will have had experience.
2. There are websites where you can look for a financial adviser in your area: yourbestinterests.com.au has a list of qualified advisers. Adviser Ratings (adviserratings.com.au) has client and professional ratings. ASIC’s MoneySmart site (moneysmart.gov.au) has a register.
3. You must feel comfortable with your adviser and they should resonate with you. Ask if he or she is the principal of the business. If so, who in the business can help you if they are unavailable?
4. Your adviser should listen. They need to understand what it is you seek to achieve and what is important to you. They should ask you questions that are thought-provoking and engaging as part of this process.
5. If they have their own company, are they self-licensed or are they licensed through another entity that is ultimately responsible for the advice? If self-licensed, ask about professional indemnity insurance.
6. What kind of services can they provide at the start and in a long-term relationship? Find out what an adviser can and cannot do. Once you’ve found the right one, you don’t want to have to change as your circumstances do.
7. Do they have a professional certification such as the Fellow Charted Financial Practitioner (FChFP)? How long have they been practising?
8. By law, advisers must explain in advance all of the remuneration they will receive from advising you so be comfortable with any fees and commissions.
9. Is your adviser a member of a professional body like the Association of Financial Advisers (AFA), with a strict Code of Conduct? They should be.
10. Lastly, check on the ASIC Register for their background. A brief Google search won’t go astray for additional information or the public profile of the financial adviser. One of the hardest things for an adviser is managing the constantly changing investment environment and your changing circumstances. This is why you need a competent professional who will continue to review your plan with you. It should be a rewarding relationship for both of you.