When it comes to your financial future and your superannuation, the advice of a good financial planner should not be underestimated.
Financial planners can help you make the most of your current financial situation, provide financial advice on tax issues related to your investments, and help you lay the foundation for your retirement. However, after the failure of Storm Financial and Opes Prime, the spotlight has been placed on the shortcomings of the financial planning industry and you may be wondering how best to evaluate the financial advice you receive.
When you seek financial advice, it is important to know that your financial advisor has the appropriate skills and experience and that the dealer group he or she is associated with has the ability to deliver the ongoing services you require.
The following questions may be useful in helping you to assess the merits of a financial planner:
1. Do they have a Financial Services Guide?
All financial planners are legally required to produce a Financial Services Guide (FSG), which gives you an easy to understand explanation of their fee structure and the services they offer. The FSG should enable you to 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 planner must meet the knowledge, skills and integrity standards required by ASIC.
3. What are their qualifications and experience?
Check that the financial advisor has appropriate qualifications, preferably at least a Diploma of Financial Planning. Ask how long they have been a financial planner and the types of clients they typically work with.
4. Are they a member of a professional association?
We strongly advise that any financial planner you use is a member of the Australian Financial Planning Association (FPA), the Institute of Chartered Accountants in Australia (ICAA) or the 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 are bound to adhere to Codes of Ethics and strict operating guidelines to 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?
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 might be payable by you (directly or indirectly).
When seeking financial advice, always remember it's your money you are investing. Take the time to evaluate your financial planner's advice and don't be afraid to ask questions. To find out more about the services that a financial planner can offer and how they can help you build wealth, call 1300 55 10 45 or visit www.intellichoicefp.com.au
