Like any profession, there are the so-so, good and great financial advisers in Australia, so how do you find that great adviser? With a decision as important as choosing your new family ‘financial controller’, here are a few easy things you can do to help you make the right choice…
By Kellie Cowie
Meet with several:
Don’t just meet with 1 adviser, cross your fingers and hope they are ‘The One’ for you. Whilst you are doing your due diligence and researching options, come up with a list of ‘top 3’ (or 4 or 5) advisers and organise meetings with all of them, preferably fairly close together in your diary. You want to be able to walk out of a meeting and be able to immediately compare to the others you have seen (or will be seeing). Try to be consistent with the questions you ask them as part of your due diligence so you can compare answers (yes, you get to ask them questions too!). Treat each meeting like a job interview because you are looking to establish a long-term relationship.
Try before you buy:
Further to the previous point, ensure that your free initial meeting answers all the questions you have before you commit to having the adviser draw up a financial plan for you. You want to gather information like the ongoing fees you will be paying, the scope of the advice (what areas are they going to make recommendations in?) and ensure you understand the service you can expect from the adviser on an ongoing basis (how many meetings per year, do they offer monthly e-newsletters and quarterly reports on your investments?)
Education minimum standards in the Financial Planning industry are about to increase. At the moment, an adviser is only required to hold a Diploma level qualification, however from 2024 all advisers must hold a degree as a minimum. This is definitely a good thing for the industry and a win for consumers. When researching your potential adviser, check their qualifications and make sure they suit the area you want advice in; for example, if you are looking to explore setting up a Self Managed Super Fund (SMSF), perhaps you want to work with an adviser that has a qualification specifically in this specialist area of finance.
Yes, experience is important, however I’m not necessarily talking about years in the industry here. I am talking about experience with similar clients, to those in your situation. If I were looking for advice as a Gen Y, then I would probably be looking for an adviser who already has many Gen Y clients and so they know what people in that (general) stage of life require for their financial future. If, on the other hand, I wanted to refer my parents to an Adviser, then I would look for someone who specialises in pre retirees. Financial Advisers who are ‘everything to everyone’ may know lots of general information, but may miss the nuances of each generation’s financial needs.
I read in an article recently that said, “look for an adviser with grey hair”. I think this is the most unfair thing I have ever read and totally incorrect. In my personal experience, young advisers are generally much more client-service orientated and can be more up to date on a wide variety of technology and industry knowledge. If you still aren’t convinced, know that many younger advisers are under the mentorship of an experienced adviser, so you are getting the wisdom of the older ‘grey haired’ adviser indirectly anyway! Never judge a book by its cover - go on merits.
Seek Reviews and Testimonials:
Who better to tell you what the Adviser is like than an existing or past client? Adviser Ratings is an online independent review platform where you can rate and review your Adviser and as a consumer looking for an Adviser, you can read testimonials using this independent source (because we know an adviser isn’t going to put any negative reviews on their own website!)
ASIC’s ‘Moneysmart’ website is another great independent place to ensure your adviser is correctly accredited and registered.
Like many industries, sometimes you want to meet with someone just to discuss one specific issue. Although the adviser will need to gather a range of information to ensure their advice is appropriate, they can just act on your instructions to focus on a single facet of your finances - like Superannuation, Aged Care or Insurance. If you are wanting a specialist area of your finances addressed, it is even more imperative that you find someone with the right expertise (experience, qualifications etc) for you.
Although not compulsory in the Financial Advice industry, members of a professional (Financial Planning orientated) association is important because that membership generally requires advisers to go above and beyond in terms of abiding to a Code of Conduct setting higher professional standards ensuring consumer protection. Basically the Association will monitor their members and require them to maintain a high standard of ethical principles.