My super fund’s no help. So how do I choose a good financial advisor?
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I have considered the financial advice offered on my pension fund’s website and it is clear that I will need a real person who understands my situation. There are too many variables for a quick survey to cover; Including non-super topics.
So how do I choose a good financial planner? When we meet, what do I prepare for to get the most out of the meeting? What kind of plans should I expect and how and when will we measure success and review the strategy?
Thanks for your question, and it’s great to hear that AI and the internet haven’t yet made us financial planners completely irrelevant!
When it comes to finding a planner, most people start by asking friends and family if they have someone they would find suitable to work with. You can also use: Find a Planner Tool provided by our professional organization.
There will be an initial meeting where you share your goals and current financial situation. Planners will often send you a survey before the first meeting so they have your basic details in advance to ensure your meeting time isn’t wasted recording them.
It will definitely be helpful to attend the first meeting knowing your financial basics such as your pension balance, mortgage details and investment balance. I find that people often can’t easily figure out how much they spend (and want to spend in the future), so if this is a blind spot for you, perhaps spend some time on this before the first meeting.
Based on this information the planner will give you a quote to undertake your project. You shouldn’t expect to get any advice at this first meeting.
Your planner and his team will then begin work, and you will have a second meeting three or four weeks later where they will present their findings and recommendations.
At the heart of this meeting will be a document called the Statement of Advice, which is the legal format in which financial advice must be delivered. Planners may also have other supporting materials to help you understand the basis of their recommendations, including forecasts so you can see the long-term outlook.
You then take some time to digest the plan and come back to the planner with clarifying questions. Assuming you choose to adopt the planner’s recommendations, they will assist you in implementing the plan.
While most financial planning practices conduct annual reviews with their clients, some hold more frequent meetings. In these meetings, your original goals are reviewed, an assessment of progress is made, and whether these goals require any updates.
Action items such as cash replenishment, investment changes or new forecasts stem from these reviews to ensure the long-term position remains solid. Each financial planning practice will have its own process, but this outline should be fairly consistent with most.
The regulatory requirements for becoming a licensed counselor are very high. Check if your financial planner is registered at: Registration of Financial Advisors.
Once this box is ticked, you can trust their technical competence and gain access to the high level of consumer protection that the Australian system provides.
Your priority should be to find someone with whom you feel comfortable having open and frank discussions. You want to have a working relationship with someone who will tell you if you’re about to do something stupid.
Paul Benson is a Certified Financial Planner. Guidance Financial Services. He is hosting Financial Autonomy podcast. Questions: paul@financialautonomy.com.au
- The advice given in this article is general in nature and is not intended to influence readers’ decisions about investments or financial products. They should always seek their own professional advice, taking into account their personal circumstances, before making any financial decisions.
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Paul Benson is a Certified Financial Planner and host of the Financial Autonomy podcast.
