It has been well documented that times in the financial industry are changing and financial advice as a profession has well become of age. There are more than 20,000 licensed financial advisers in Australia.
So where do you start? How do you sort the Bernie Madoffs from the Warren Buffets?
Difficult and complex decisions indeed. Luckily, we are here to help you select the right financial advisers for your requirements and to take you on your next financial journey through the 17 questions to ask your financial adviser. Now, utilising these won’t guarantee you the perfect adviser, but will reduce the odds of a dud.
- Will you always work in the client’s best interest?
This is not a problem for Australia’s financial planners as we are required, by law, to act in the best interests of our clients.
- Does anybody else ever pay you to advise me and, if so, do you earn more to recommend certain products or services?
It has been illegal to receive payment from the managers of funds recommended by a financial adviser since 2013. However, most advisers receive payments from the insurance products they recommend. In January 2018, advisers will receive the same commissions from insurers, and volume bonuses for channelling business to one particular insurer have been outlawed.
- Will you itemise all your fees and expenses in writing?
All fees should be transparent and disclosed in your Statement of Advice document.
- Are your fees negotiable?
We believe that fees should not be negotiable as all clients should be charged by the same methodology. Existing clients should not subsidise new clients, nor should those with quality negotiating skills obtain favourable terms.
- Do you pay referral fees to generate new clients?
Many advisers pay referral fees to lawyers and accountants to refer new clients. Provided this is fully disclosed, there is no conflict. In our case, we don’t, and prefer to simply refer business to other like-minded professionals that we know, like and trust will put our clients best interest in front of theirs.
- Do you focus solely on investment management, or do you also advise on taxes, estates and retirement, budgeting and debt management, and insurance?
Some firms offer all these functions in-house, but the majority work with other professionals (such as estate planning lawyers and accountants). No issue, again provided all relationships are disclosed.
- How do you report investment performance?
All investment returns (after fees) should be available anytime over any period, and should also be benchmarked.
- Which professional credentials should your financial planner have?
The CFP is the gold standard in Australia. It doesn’t guarantee great advice, but it reduces the odds of engaging a dud. In our case, we advise clients to seek advice from advisers that hold or are working towards either a Masters in Financial Planning, becoming a Certified Financial Planner or Fellow Chartered Financial Practioner. You can be more confident in these advisers as they have invested considerable amounts time and money in their education for a long-term career in financial planning.
- Who is your ideal client?
If the response sounds like ‘’everyone’, it might be best to move on. Advisers are increasingly specialising. This is a good thing!
- Can you provide me with testimonials from clients in a similar situation?
Always ask for this. We would recommend looking at Adviser Ratings. It contains testimonials from the adviser’s clients and a rating.
It is evident filtering and selecting the right financial adviser for you is a significant decision. At Altitude Wealth Management, our mission is simple; we enhance the lives of our clients by providing clarity and structure in managing their overall financial position towards retirement.
Our clients have partnered with our team of experienced and qualified financial planning professionals endeavour to ensure they achieve their financial and life goals.
Looking to secure your future financials?
Contact Altitude Wealth Management today on (07) 4753 5777 or via email at email@example.com to speak with one of our friendly consultants on how you can secure your future.