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How to choose a financial adviser

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Financial advisers aren’t just for the very rich. They can help Australians from all walks of life realise their financial goals.

But, as with any industry, some financial advisers are better than others. So how do you find a good one?

What can a financial adviser help with?

A financial adviser is someone who can help you set your financial goals, before putting a plan in place on how to achieve them. Depending on the adviser you work with, they can typically provide advice on areas such as:

Their advice should be tailored to your personal situation and can take the form of:

  • One-off advice – when you have a single issue you need advice on. For example, exploring your options if you inherit some shares
  • Comprehensive advice – when you work with an adviser to develop a financial plan to reach your goals
  • Ongoing advice – when your financial affairs are quite complicated and you need regular meetings to ensure everything’s on track with your financial plan

Anyone that gives financial advice must have an Australian financial services (AFS) licence, and act in your best interests, not their own.

What about robo-advice?

Robo-advice is financial advice from an algorithm, with little to no human interaction. Rather, all you have to do is pay a small fee, and provide a few key details about your risk tolerance and financial goals. In return, the computer program gives you investment guidance based on your answers. 

While robo-advice is typically cheaper than a traditional financial adviser, these services do have their limitations. No matter how sophisticated their programming claims to be, the advice they give isn’t 100% personalised. Automated services may also find it hard to deal with complicated financial situations.

How to choose a financial adviser

When it comes to getting financial advice, you need to find someone you can trust. So take your time, research their background and qualifications, and compare all your options as you try to find an adviser that’s the right fit for you.

The first step is to check the financial advisers register to confirm they have a current AFS licence. You’ll also be able to see:

  • How long they’ve been licensed
  • Their qualifications
  • Their professional memberships
  • What product areas they can advise on

All financial advisers should have a copy of their financial services guide on their website. This is another good place to start as it covers:

  • Their services
  • Their fees
  • The ownership of their company
  • Any links to product providers
  • Their AFS licence number

Once you’ve shortlisted some candidates, it can be a good idea to meet them face-to-face so you can compare your experience. Ask them plenty of questions so you can find out more about:

  • Their experience
  • Their qualifications
  • Their areas of expertise
  • How they charge for their services
  • How they’ll manage your money
  • How often you’ll meet
  • What information you’ll receive and how often
  • How they’ll consult you on decisions
  • How they’ll monitor and manage your portfolio

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