When you seek financial advice it’s important to know that your adviser has the appropriate skills and experience and that the Australian Financial Services Licensee he or she is associated with is able to deliver the ongoing services you need. Read More
The following questions may help you to assess the merits of a financial adviser:
1. Do they have a Financial Services Guide (FSG)? All financial advisers are required by law to produce an FSG which gives you an easy-to-understand explanation of their fee structure and the services they offer. The FSG should help you make an informed decision about whether you want to use their services.
2. Are they, or their company, licensed by the Australian Securities and Investments Commission (ASIC)?
An authorised financial adviser must meet the knowledge, skills and integrity standards required by ASIC.
3. What are their qualifications and experience? Check that the financial adviser has appropriate qualifications, preferably at least a Diploma of Financial Planning. Ask how long they have been a financial adviser and what types of clients they typically work with.
4. Are they a member of a professional association? We strongly advise that any financial adviser you use is a member of the Australian Financial Planning Association (FPA), the Institute of Chartered Accountants in Australia (ICAA) or a Certified Practising Accountant (CPA).
The FPA is the professional body for financial advisers in Australia, while ICAA and CPA are the professional bodies for Accountants in Australia. Members must abide by Codes of Ethics and strict operating guidelines which protect clients’ rights.
5. What services do they offer?
Does the adviser only offer investment advice or do they offer total financial solutions including insurance, tax, estate planning and so on. Do they have formal ongoing review services? Do they offer investment administration services? (The financial adviser’s FSG will list the services they provide.)
6. How are they paid for their services?
Find out if they operate on a flat fee, brokerage or commission basis. Ask them to explain all upfront, ongoing and exit fees which you might have to pay (directly or indirectly). (The financial adviser’s FSG will include this information.)
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