How to choose a financial adviser
Written by Glen James
Host of the Retire Right & money money money (formerly my millennial money) podcasts & author of The Quick-Start Guide to Investing.
If you’re interested in learning more about getting financial advise, have a listen to this episode:
Choosing a financial adviser can feel a bit overwhelming, especially if you’re not from the personal finance world. It’s also natural to feel protective of the money you’ve saved up over a lifetime for retirement! And does everyone need to see a financial adviser? To be totally honest, no. Not everyone needs a financial adviser, but everyone needs a financial plan.
But if you have a number of goals you’d like to achieve, and seeking the support of a qualified third-party would help you, then you’d gain value from a financial adviser. There’s a lot of misunderstanding out there about what a financial adviser does, when you need to see one and how much it costs. Let’s bring some clarity!
How do you know if the financial adviser is the right fit?
It’s important you feel comfortable with the adviser you choose—it’s especially important that they listen to you and are on the same wavelength. You’ll know whether this is happening if they ask more questions about you and your goals than telling you about themselves. You need to feel confident that they get you on a human level—there has to be a connection. Also check out that they help other people like you (i.e. only focus on pre-retirees or retirees). You’ll know when you’ve found the right person if you feel a connection with them.
How do you know if they are legitimate?
Generally if they are recommended to you by a trusted source, you'll be fine. You can also search the financial adviser register with their name to see how long they have been an adviser and if they have been banned. Also do a basic check on Google reviews. Reforms like the Future of Financial Advice (FOFA) reforms, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, required education standards. It would be a rare exception that you’d be ripped off. There are so many eyes watching financial advisers now. Find an adviser through a trusted source, check them out and you’re on your way.
What does it cost to see a financial adviser?
This holds a lot of people back—uncertainty around the cost of good financial advice. No one should work for free (you don’t, right?)—the cost will generally be in the thousands (depending on the complexity of time and research needed to achieve your goals). But good advice should pay for itself and with the right guidance you’ll be doing better on the other side.
It also depends on your needs and the kind of advice you’re looking for (retirement planning vs inheritance vs insurance vs shares etc). Ask up front how the adviser receives payment and make sure you understand what kind of advice you need, what they offer and their suggestions. It’s important that the adviser is the right fit for you, so you get maximum value from your chats and the final plans put in place. Make sure you understand everything and don’t be afraid to ask questions about it all—if they’re not willing to answer your questions, they might not be the right fit for you.
Where do you go to find a financial adviser?
Being referred to an adviser through a trusted source is a great place to start. You can start by asking friends and family who they’ve used and if they were happy with them, then Google them and read their reviews. Check out websites like adviser ratings to see how they stack up. If you would like to be connected to a financial adviser to chat through your situation, reach out here. We have a panel of advisers we know are legit and do good work, so feel free to get in touch and we’ll see how we can help.
