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    What areas of financial planning are you looking for advice on?

Book a FREE consultation
and receive your complimentary eBook

Get started with a free strategy consultation and receive a copy of the Good Fortune Guide – written by James McFall, Managing Director Yield FP and 2020 National Finalist Certified Financial Planner of the Year to help educate you on your Financial Plan.

Choosing a Financial Advisor – Finding an Advisor That Fits You

Have you found yourself asking why good financial advice is so important? This article will elaborate on why good financial advice is crucial, and how to choose a financial advisor that fits your needs.

In today’s uncertain economy, correct financial advice is absolutely essential. It can even mean the difference between poverty and prosperity. From managing business expenses, to investments, to your superannuation, the household budget and more, properly managing your money can be overwhelming.

That’s why it’s vital to choose the right financial advisor for your needs.

HOW DO YOU FIND THE RIGHT FINANCIAL ADVISOR?

Once you’ve determined exactly what you need from a financial advisor, start searching for one who offers the services you’re looking for. It’s important to carefully consider your decision, as you will likely form a long-term professional relationship with your advisor.

As with most services these days, doing your due diligence online to find an advisor that clearly provides advice that meets your need is a start. Search for an advisor that can demonstrate they are experts on the specific advice you need, by way of the blogs they write on their website, the reviews they receive on Google, testimonials given by their clients and other content output they may have written for media, that gives you confidence in their knowledge.

Knowledge of the options after all is essential to you knowing that all avenues are being thought about, when determining what advice is best for you. Most importantly you want to avoid the advisor who gives a one size fits all advice.

INDUSTRY ASSOCIATIONS

Industry associations are another useful resource. With handy “find an advisor” services, industry associations can help you find a knowledgeable financial advisor in your area.

These associations usually require members to participate in regular training and have a compulsory code of conduct.

Look for members that have demonstrated that they go above and beyond the industry standard. Certified Financial Planner is one designation that reflects personal educational achievement, as do related degree qualifications. Other designations like Financial Planning Association ‘Professional Practice’, also demonstrate a high commitment to quality, ethical advice.

USE THE FIND A PLANNER TOOL

To make your search for the perfect financial planner even simpler, the Financial Planning Association of Australia offers an easy to use tool.

The find a planner tool will help you find a financial advisor in your local area, who specialises in your specific financial needs. Access this innovative tool by visiting: www.fpa.com.au/find-a-planner tool.

HOW TO CHOOSE A FINANCIAL ADVISOR

When you have a shortlist of financial advisors, ensure you check their history, qualifications and employment status before making your final choice. A convenient way to do this is looking up your advisor on the Financial Advisors Register.

The Register will tell you:

  • The advisor’s qualifications and experience
  • Which areas the advisor can provide advice about
  • Whether your advisor is a member of any industry associations or professional bodies relevant to financial services
  • The name and number of the Australian Financial Services (AFS) licence holder who authorises your advior to dispense financial advice
  • Whether your advisor has been subject to any disciplinary action by ASIC

If an advisor does not have a valid licence, choose another advisor. By operating without a licence, the advisor is breaking the law and you will not be protected if things go badly.

READ THE FINANCIAL SERVICES GUIDE

When approaching a potential financial advisor, ask them for a financial services guide (FSG). This guide will tell you:

  • Which services your advisor will offer
  • Their rates, how they charge and whether they receive any other benefits or payments
  • The owner of your advisor’s company
  • If your advisor is affiliated with any product providers (i.e. many advisors are linked to banks, life insurance firms and fund managers – this can impact the services and products they offer)
  • Your advisor’s licence number

EXAMINE YOUR ADVISOR’S EXPERIENCE AND QUALIFICATIONS

A financial advisor can be qualified to give advice after meeting minimal training requirements. To ensure you get the right advice for your needs, find an advisor with a degree qualification in financial planning and preferably look for Certified Financial Planners as well (CFP). The globally recognised highest qualification for Financial Planners.

ASK YOUR ADVISOR ABOUT THEIR EXPERIENCE

Asking your advisor about their typical clients will help you decide whether they have the right experience to help you achieve your goals. For instance, does your advisor primarily deal with retirees, young families, or first-time investors?

The depth of your advisor’s experience is also important. For instance, a recently graduated financial advisor may be highly qualified, but may not be as experienced as an older advisor with fewer qualifications.

CONTINUAL PROFESSIONAL DEVELOPMENT

For financial advisors, learning is a lifelong process. Like many other professionals, a vital part of a financial advisor’s job is keeping up with the latest developments in the financial industry.

A good financial advisor should participate in regular training programs, such as courses or seminars, run by registered training organisations, professional bodies or industry associations.

GETTING TO KNOW YOUR FINANCIAL ADVISOR

To help you get to know each other better, the majority of financial advisors will offer a no-obligation, no fee initial consultation. During this session, explain your financial goals, your current financial situation and what you hope to achieve.

Remember, this professional relationship could potentially last for years, and you are placing a great deal of trust in this person. So, if you don’t feel it is working, keep searching until you find the right fit.

KNOW EXACTLY WHAT YOU’RE GETTING INTO

Before hiring your financial advisor, ask them for a comprehensive estimate of the cost of the advice. This way, you’ll know exactly what you’re paying and where the money is going.

For example, these are some of the fees you may be charged when engaging a financial advisor.

First meeting with a financial advisor – this is often free. During this meeting, you’ll discuss your advice needs and the advisor will tell you how they can help.

  • Statement of Advice (SOA) fee – If you continue with your advisor, an SOA will be prepared. This document includes the advisor’s understanding of your financial circumstances, financial goals, strategies to achieve these goals and information on any recommended financial products.
  • Fee to implement financial advice – If you accept these recommendations, you may be charged for the advice. This fee covers the administration work involved. The amount reflects the complexity of the advice you receive, and the work required to implement the advice.
  • Continual financial advice fees – If you elect to receive ongoing advice, this fee will cover:
  • Regular reviews with your advisor
  • Regular investment portfolio reports
  • Access to your advisor via phone or email
  • Newsletters
  • Invitations to seminars

SIGNS YOU’VE FOUND A GOOD FINANCIAL PLANNER

Firstly, a good financial advisor understands that no matter who they work for or are licensed through, their ultimate fiduciary and legal responsibility is to you, the client. They should also be a member of an industry association, such as the Financial Planning Association, and follow their code of conduct.

They will also explain the financial planning process, their upfront and ongoing fees, and about their experience and background in financial planning during your first meeting. However, if you feel they’ve missed something important, don’t hesitate to speak up.

For more advice on how to choose a financial advisor to suit your needs, contact the friendly team at Yield Financial Planning today.

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About Yield - Financial Planner Melbourne

Who we serve – We help time poor professionals and business owners who intuitively know they should be doing more to improve their financial position and are seeking an expert to guide them on financial planning strategies. Our clients want personalised financial planning advice and to feel empowered and confident that they can achieve a secure transition to retirement.

What we do – We gain a deep understanding of your current financial position and preferences, what you value and want to achieve. We then help you develop a highly personalised financial plan, to show you how to make your money work harder for you. Ongoing we regularly monitor and measure progress against your plan projections, to show you how you’re tracking and help you manage change to your advantage.

How we do it – We apply our proven expertise in investment markets (Shares & Property), Tax and Debt structuring, Retirement Planning, Risk management and Estate planning, to help you reorganise the way you use your money to achieve your desired outcomes.

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