The way to establish an enduring financial advice relationship you can trust, is to work with an ethical financial advisor. An ethical financial advisor Melbourne will demonstrate professionalism, expertise, and always work in your best interest. In this blog we break down what ethical financial advice is in Australia, including:
- Characteristics of an Ethical Financial Advisor
- Financial Advice since the Banking Royal Commission
- Finding an Ethical Financial Advisor Melbourne you relate to
- Ethical Financial Advice and investing
We will also demonstrate what makes Yield Financial Planning, a proven ethical financial advisor Melbourne, and an obvious first choice.
Characteristics of an Ethical Financial Advisor
When searching for an ethical financial advisor Melbourne there are various characteristics to look for. Some important ones include:
- Transparency: An ethical advisor will always be upfront with you regarding their process and fees. They will be clear and honest at every step keeping you well informed on the advice you receive. Not all firms publish their fees openly, however you can read about Yield’s here.
- Professionalism: An ethical financial advisor will put your needs before their own. They will demonstrate this by listening to what is important to you, and providing advice that reflects they have understood. Moreover, you should expect high skill, good judgement, and polite behaviour throughout all interactions.
- Respect: Your financial advisor will be empathetic and understanding. Because ethical financial advisors will always strive to develop client relationships built on trust and respect. This is something you will be able to ‘feel’ and is essential for highly personalised financial planning, that reflects your goals and boundaries.
Here at Yield, our team values are what bind us. They are on our walls, website, corporate brochure and regularly referred to in our team meetings and team reviews. Being ethical is cultural for us, because it is essential to us providing best interest advice for our clients.
Financial Advice since the Banking Royal Commission
There are a number of legislative obligations designed to ensure your advice is high quality and ethical. Since the banking royal commission, ASIC have introduced the Financial Planners and Advisors Code of Ethics 2019. This places a duty on financial advisors to act in your best interest, that also ensures there is no conflict of interest.
Other regulatory changes that have been imposed on financial advisors include raising minimum education standards. This has resulted in a literal exodus of advisors. To highlight this, the Financial Standard reported that in 2022, 17.3% of financial advisors quit, leaving the total number of advisors in December 2022 at 15,841. This is the lowest number of financial advisors in Australia in 19 years, and almost half of what we had at our peak.
For you, the rapid decline in financial advisors in Australia means that there are fewer advisors to choose from. But it also means that the remaining advisors have demonstrated alignment to the ethical expectations required.
Finding an Ethical Financial Advisor in Melbourne that you relate to
There are a range of ways that ethical financial advisors can prove their professionalism and ethical values to you. Membership of industry bodies is one example of this.
The Financial Advice Association or Australia (FAAA), are the custodians of the globally recognised designation Certified Financial Planner (CFP). To be CFP, the advisor must have achieved higher education standards, and be committed to uphold the FAAA’s code of ethics. This is therefore a screen for you, about the advisors ethics. Businesses can also apply to become an FAAA Professional Practice when at least 50% of the teams advisors are CFP. Yield Financial Planning are proud to be an FAAA Professional Practice.
More generally, you should start by looking online. There are lots of ways you can research potential advisors and the firm they represent. To start, take a look at the company website and review the businesses explanation of who they are and their history. You can determine if you relate to their message. Also read some reviews like Google reviews or Facebook ratings, that provide great insight on real life client experiences.
The FAAA is the biggest financial planning body and they publish a profile of their members. This outlines things like the advisors experience, values and mission.
You will also find that some advice firms provide client case studies. Case studies are arguably the best way to find a suitable financial advisor, because you can see the depth of advice the firm offers, and how it may relate to you.
Always take the time to look at the an advisors personal and business LinkedIn too, as it is a purpose built professional networking tool, that holds lots of relevant information.
Doing your due diligence, is a great starting place and will help you find an ethical financial advisor Melbourne that is well matched.
Ethical Financial Advice and Investing
Ethical financial advice can extend to more than just the advisor and advice firm themselves. For many people, ethical financial advice also means investing ethically. One thing to understand though is that not all ethical financial advisors provide ethical investment advice. So it is important to be clear on what ethical alignment means to you.
If ethical investment advice is important to you, you need to also understand what this means to the advisor, to see if their methodology aligns. There can be a lot of nuance in ethical investing, and this means it often means different things to different people. For example you may want to exclude fossil fuels, whereas others want no gambling.
At Yield, we can invest with an ethical overlay. This means we are focused on ESG ratings and actively avoid investments that are not ethical, however it is not entirely prescriptive, and therefore will not satisfy all ethical investors. We can have a conversation about what investing ethically means for you, to see if our approach is aligned.
Ethical Financial Advisor Melbourne
Considering everything we have covered, you are armed with the information to find an ethical financial advisor in Melbourne. In summary though, find an advisor that demonstrates that they really understand you. Look for recognition in the form of reviews, awards and qualifications that resonate with you. And find an advisor that can satisfy you through demonstration, that they can really help you achieve what you want from your life.
About Yield Financial Planning
Yield is proud to be one of the early adopters of fee for service investment advice in Australia. We have operated this way since our inception in 2006. Because it is transparent, and this is what we are all about!
As an FAAA professional practice, we have been identified as an ethical financial advisor in Melbourne.
We also provide ethical investment advice, as we recognise that ethical investing is important to many of our clients.
At Yield, our vision is to be the local leader of premium retirement planning advice. We are always focused on developing deep connections with our clients, and would love the opportunity to connect.
If you are looking for a financial advisor that can help you live life confidently the way you want, then you have come to the right place. We’d love to talk and our initial meeting is free.