How to choose an adviser
A financial adviser can give you a big picture view of your financial circumstances and set up a plan that gives you long-term direction when investing.
You don’t have to hire a financial adviser when you invest but if you’re a novice investor or you’re planning to invest in assets you don’t know much about, then hiring a person who knows more than you on the subject can be helpful.
7 tips when choosing a financial adviser:
Here’s 7 tips to help you choose an financial adviser. The tips are courtesy of the Australian Securities and Investments Commission (ASIC).
Tip 1
Deal only with a licensed advisory business.
You can find out if the adviser you’re chatting to is licensed by checking out their details on the ASIC website (www.asic.gov.au).
Tip 2
Pick the adviser with the strongest qualifications, experience and integrity.
You can ask the adviser if you can speak with other clients who can then give you an idea of the integrity and experience of the adviser.
Tip 3
Ask questions until you really understand.
Don’t be intimidated by jargon or mention of other clients with millions of dollars — you money is the same colour as their money. If you don’t understand what the adviser is saying, then ask him or her to explain again.
Tip 4
If you feel uneasy, it’s OK to walk away.
After all, it’s your life and your money. Financial advice is a people business and not all personalities get along. People communicate using different styles and advisers understand this.
Australians are generally a polite bunch and believe it’s rude to walk away once a relationship is established. When it comes to your financial security, risking an adviser’s bruised ego is a small cost when the alternative is sticking with an adviser who is not suitable for your long-term financial needs.
Tip 5
Make sure your financial plan suits your needs and personality.
Ask as many questions as you need to fully understand your risk profile and the asset allocation that your adviser is suggesting. Are you comfortable with the proposed investments? Will you sleep at night?
Tip 6
When you get a good plan, stick to it.
Investing takes discipline and focus. You paid for a financial plan for a reason. The best value you can get from your financial plan is by sticking to the plan.
Tip 7
Keep all your paperwork.
Don’t kiss your money goodbye
The Australian Securities and Investments Commission (ASIC) in conjunction with the Financial Planning Association has produced a nifty booklet, ‘Don’t kiss your money goodbye’ to help you choose an adviser. The booklet takes you through 7 steps with plain-English explanations of each step.
‘Don’t kiss your money goodbye’ also gives you 9 ways to check that your financial plan is robust and 8 golden rules to protect you from fraud or other avoidable financial disasters.
You can get a copy of the booklet on ASIC’s consumer website (www.fido.gov.au) or you can email ASIC (infoline@asic.gov.au) and request a free copy.
Northstar Financial Advisers Pty Ltd is an Australian Financial Services Licensee – Licence Number 313618
