While it has improved in recent
years, in my opinion the base level of
qualification to provide financial advice
is still too low. You should be looking
for more than just the minimum.
to complete an addition level of
qualification. Two examples where
some additional level of training and
accreditation is often required are
listed securities and self-managed
super funds. If there is a possibility
that you may need advice in these
areas, check for the additional
accreditation or ask if the adviser is
authorised to advise on these matters.
CONSIDERATIONS
as a long-term partner, so be sure to
consider the following when choosing
the right person for the job.
The relationship you develop with your
adviser may last for many years. It may
also end up being multigenerational.
For this reason, I suggest you choose
someone that is not going to retire in
the next year or two.
To get a feel for whether the advisor
is going to understand your particular
situation, it's a good idea to ask what
types of clients they normally deal
with. While there may be a range,
almost all advisors that have been
around for a while will lean toward
having most of their clients in a
particular segment.
Be very careful of advisors that
make big promises. A quality advisor
does not need to provide the lure
of high returns or huge tax savings.
Unfortunately I have seen this on
many occasions, and people do fall
for it. If promises are being made
that seem too good to be true, they
probably are.
It's important to determine what level
of service you would like to receive.
Ask how often will you be reviewing
your financial plans and how often
you should expect to be contacted by
the adviser. Again, this will give you
a better perspective as to whether
the fees are reasonable and will also
establish clear expectations for
both parties.
Being armed with the right questions
to ask yet not knowing if the response
you receive is the right one can be
an issue. One of the best ways is to
address this is to gain at least a basic
understanding of financial matters.
This can be done through reading or
attending an education program. You
don't have to spend countless hours
doing this, but a small investment
of your time can pay off in spades,
and you will be probably feel more
confident knowing you are not
proceeding purely on blind faith.
services offered
Understanding the types of services
you're after can give you a way to
shortlist potential advisers. If you
are thinking of establishing a self-
person you are talking to is skilled in
that area. Do they have clients in a
similar position to you? If you require
legal or accounting advice, do they
have associates in these areas? While
many advisers refer this to another
business (and that is fine), it is
important that they have contacts
so all areas of your financial position
can be addressed.
your contract
When deciding on which adviser to
use, I recommend that you establish
the costs or timeframes required if
you choose to terminate their services.
Most of the old and nasty exit fees
have been removed from products,
however you should be careful of any
issues that could make it potentially
difficult to leave.
timeframe of, say, 30 days. The onus is
on you to determine what the process
is to leave if you are unhappy.
distinction between the adviser and
the investments. This may allow you
to terminate the adviser's services
without affecting your investments.
It can be as simple as signing a letter
diverting the advisory fees you are
paying from the investment to the
new advisory firm, or cancelling
them altogether.