Whether it’s for tax planning, investing, estate planning, debt management or during a time of change, everyone could benefit from the help of a financial adviser. Still, it’s important to go into a relationship with a financial adviser with your eyes wide open, and this means asking your financial adviser a series of questions. Here are five to get you started.
1. How do you get paid for services?
It’s important that you understand how your financial adviser is compensated for what they do. The days of financial advisers providing a ‘free’ Statement of Advice and earning their fees from the commission on investments they are selling are now past, thanks to the Future of Financial Advice reforms that commenced in 2013. Now, you can expect to pay an Advice Preparation Fee (or ‘Plan Fee’) that covers the planner’s time in meeting with you, discovering more about your situation, objectives and any existing products.
If you decide to proceed with the implementation of the advice, you should expect to pay for the planner’s time in completing, lodging and following up on the paperwork to put your financial plan into action. The most important part of having a plan is ensuring it is monitored and reviewed regularly, so you should expect to pay an Ongoing Advisory Service Fee to have continued access to your adviser.
2. What’s your investment philosophy?
It makes sense to ask your financial adviser how they would approach your financial plan based on both their understanding of your circumstances and what their investment philosophy is. This will give you an idea as to what the company’s asset management view is, and also the different investment approaches they may take relating to your finances.
3. What are your credentials?
All authorised representatives of a financial planning business must now complete a minimum of 40 hours of continued professional development (CPD) annually. These CPD points ensure that advisers stay updated with industry trends, regulations, and best practices. For new financial advisers, the minimum education requirement is an approved bachelor’s degree (AQF7 level) comprising 24 subjects. You can find more information about these requirements on the FASEA website. This mandatory CPD can provide you with confidence that your adviser is continually enhancing their skills and knowledge to better serve your financial needs.
4. How often will we meet?
Early in your working relationship, you’ll want to keep closely connected with your financial adviser. Once you’ve established a solid plan, however, things can operate on autopilot a bit more. As a general rule, you will generally meet and have an in-depth discussion with your financial adviser at least once or twice a year. Though, our advisers at Prime will be readily accessible to address any financial concerns or questions whenever they arise.
Choosing the right financial adviser is crucial for achieving your financial goals, so it's essential to ask the right questions before entering into a professional relationship. By thoroughly understanding your adviser's approach and capabilities, you can make an informed decision and establish a successful partnership for your financial future.
Whether you're planning for retirement or investing for the future, our team is here to provide personalised solutions to help you achieve your goals. Contact us today to schedule a consultation and discover how Prime Financial Group can support your financial aspirations.
