Five things you must ask your future financial adviser before saying the big “I do".
The relationship with your financial adviser could be one of the most important factors in securing your financial future. Like any good relationship, communication is important.
To make sure you get off to a productive start, ask yourself what kind of financial advice you need.
Personalised financial advice can be tailored to your particular circumstances, expectations and goals. It can involve a long-term investment strategy or a plan for retirement – whatever you personally want to achieve.
Once you have an idea of what type of financial advice you need, make sure you take some useful information to your first meeting. For example, this may include copies of:
- Tax returns, bank, investment and superannuation statements
- Your insurance policies
- Recent pay slips
- Information on credit card bills – be honest!
- Mortgage and other loan information
- Incoming and outgoing expenses
You should also give some thought to the goals you hope to achieve from your financial advice and be able to prioritise them.
Most importantly though, be ready at your first meeting to ask your potential financial adviser questions about who they are, how they work and who they work for.
Things to ask
- Ask about the adviser’s own background, qualifications and career
It’s good to understand their history and to start a good rapport. Australia has a regulated financial planning industry, so you should expect high standards from your adviser. Ask if they hold an Australian Financial Services License (AFSL), or if they are an Authorise Representative of an AFSL holder. You should also ask if they’re a member of the Financial Planning Association (FPA), or if they have completed their Certified Financial Planner qualifications through the FPA.
- How do they keep informed about market or regulatory developments?
Advisers should constantly up-skill with seminars on important changes; ask what the last course your potential adviser attended was on, so you get a sense of how up to date they are. Then ask how they intend to keep you informed of changes as well.
- What are their areas of specialisation and what kinds of clients do they mostly see?
Before you ask this question, make sure you are armed with an idea of what your own financial goals are. If their answer to this question isn’t in line with the kind of advice you need, you know it is a bad fit.
- How will I know what services they will provide and the costs involved
It’s important not to be surprised by hidden charges. All good financial advisers will be very clear about what the costs of using their services are. If you are worried, refer to their Financial Services Guide which will have all this information available to you – financial advisers are required by law to supply this document to you.
- Who owns the business they work for and any associated businesses?
If it is an independent financial adviser, rather than an adviser who works for a bank, get a history of the company they work for. A company with a long history of advising can offer a feeling of trust but make sure they are licensed by ASIC (Australian Securities and Investments Commission).
These questions should be a good basis to decide whether you want to continue with the adviser or seek another option.
Remember, you should leave the meeting feeling confident that the adviser understands your circumstances and your goals. And they should leave knowing they have enough information about you to prepare a strategy that can shape your financial future.
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The information contained in this document is based on the understanding Colonial First State Investments Limited ABN 98 002 348 352 AFS Licence 232468 has of the relevant Australian laws as at 8 August 2011. This document is not advice and is intended to provide general information only. It does not take into account your individual needs, objectives or personal circumstances. You should assess whether the information is appropriate for you and consider talking to a financial adviser before making an investment decision. Product Disclosure Statements (PDS) for products offered by Colonial First State are available from colonialfirststate.com.au or by contacting us on 13 13 36. You should read the relevant PDS and consider whether the product is right for you. Past performance and awards is no indication of future performance.
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