Choosing a financial planner

Choosing a financial planner

Many people don’t consider consulting a financial adviser until they are close to retirement. However, for the best chance for financial independence in your retirement, the earlier you start a on your financial plan, the better.

Specialist advice

While your financial institution will continue handling your regular transactions such as daily savings, term deposits and personal or housing loans, a financial adviser will provide specialist advice on strategies and products for wealth creation, superannuation saving, retirement and investments such as shares, managed funds and property trusts.

However, choosing the right financial adviser is a crucial component of a successful financial strategy. Important factors such as qualifications, licence, services offered and fees should be considered when looking for a financial planner.

The right qualifications

Some financial advisers are originally qualified in accounting, stockbroking or other fields of finance. Others have undertaken specialised training in investment and retirement planning.

To give advice on securities, such as shares, bonds and managed funds, advisers must either be licensed by the Australian Securities and Investments Commission or be an Authorised Representative of a licensee, who is responsible for their monitoring, training and supervision.

There are many duties and responsibilities imposed on individual advisers by law, policy and industry standards.

It is also important that the adviser has access to research on investment products and information on issues in the business and legislative environment that may affect investment decisions. These may be built into an ongoing service in which the adviser regularly reviews your investment strategy and portfolio performance.

Disclosure of fees

The methods of remuneration for financial advisers may vary. Financial advisers do not receive commissions or volume payments but instead charges a fee based on the service you require and agree to. This fee will often cover preparation of your financial plan and establishment of the recommended investments.

Your adviser should inform you of the fee details before you make your investment decisions. Importantly, you must be satisfied that the planner’s advice gives you the most suitable combination of investments for your needs.