Choosing your adviser
Choosing your adviser is an important personal matter. Do some research and aim to talk with a few advisers before you decide. Some will do a better job than others.
There are plenty of advisers to choose from. Look for someone who:
- will put your needs first
- works often with people in your situations
- will fit in with your personality.
Download ASIC's tips for choosing a financial adviser (PDF 59KB)
How to find some names
Talk to your family, friends or colleagues or anyone who’s seen a financial adviser. Find out about their experiences and whether they have been happy with their advice. Ask about the good points and the pitfalls.
You could also ask your other professional advisers for suggestions. For members of the Financial Planning Association in your area, contact the FPA’s Find a Planner service at www.fpa.asn.au 
or call 1800 626 393.
CPA Australia's website also provides a service to find a financial planner.
Only talk to advisers who are employed by or who are authorised to represent a licensed advisory business. ASIC licenses and regulates the financial advisory industry so that it operates efficiently, honestly and fairly. You can check licence details, or see if we’ve banned someone from advising, for free through FIDO or by phoning our Infoline on 1300 300 630. Licensing gives you more protection if something goes wrong, including the right to a free and impartial hearing of consumer disputes.
Start with the financial services guide
Phone each business and ask them to send you their financial services guide which gives you the key information you will need to help you decide if you wish to use their services, such as their fees, how to make a complaint and the business's insurance or other compensation arrangements. All licensed advisers must produce one. If they don’t send it, cross them off your list straight away. More about financial services guides
Use our advisory business worksheet to collect key information about each adviser, so you can easily compare their services and costs. If you can’t find the answer in the financial services guide, make a quick phone call to find out.
Who owns the business?
Ownership of the business can affect the services and products you’re offered. For example, an advisory business may be allowed to offer only the parent company’s products.
Many advisory businesses are owned by major financial institutions like banks, fund managers and life insurance companies. Even if they operate under a different name, the financial services guide will tell you if they’re owned or associated with other companies. Only a few financial advisory companies are independently owned.
Services offered
Check if the services offered cover your needs. For example, product restrictions can affect you. We’ve already mentioned that some businesses are limited to products issued by themselves or their parent companies. Other businesses may offer a wider selection, but may not cover the whole market.
| NOTE | This restriction can be especially important with super, because the adviser may not cover your fund. If your potential adviser is not allowed to give full advice about your fund, it may be difficult to advise you. (For example, many advisers don’t advise about industry funds, see our free booklet Super Decisions.) |
Fees and charges
You will often pay a once-off fee for getting advice.
On top of that fee, most advisers get paid commissions and bonuses on financial products you buy. Often they could earn more if you buy a particular product compared with another that could be just as good or even better. This can set a up a conflict of interest between what’s good for your adviser and what’s good for you. (The law deals with this potential problem by requiring advisers to manage conflicts and also to tell you about all commissions.)
Good advisers put your interests first anyway, but bad advisers may not. We'll tell you more about this issue when we discuss the products your adviser recommends.
What if an adviser calls you?
Take care if you get called out of the blue. The caller may be selling advice or products that do not suit you or may be a scam.
Telemarketing or ‘cold calling’ potential clients breaks the law:
- if the caller has no licence
- if the caller tries to sell you investments or financial products without following strict legal safeguards.
Even if a licensed adviser is calling you to come in and get advice by following all the steps we outline in this booklet, please take care.
Think first about what you need, and see other advisers as well. With telemarketing, the salesperson has selected you; you have not selected them.
Read Stuart's true story about what happened when he was cold called by a financial planning firm. You can also find out what questions you should ask if you get phone calls out of the blue selling investments, financial advice and financial products.
Setting up the first meeting
Contact the business and make an appointment to talk with one of their advisers. Ask to speak with an adviser, not a junior employee, and say you’ll need about 30 minutes.
Say that you’re looking for an adviser who would best suit you, and you don’t want any advice or to fill in any forms or make any commitments at this stage.
For the first meeting, you’ll need:
What to listen for
A good first meeting will involve each of you sharing the conversation.
Begin by saying you are looking for an adviser, and you feel they may be able to help you, but you won’t be making up your mind till you’ve seen 2 or 3 more. Say that you may make some notes to help you remember things. Invite the adviser to give you anything in writing that will help answer your questions.
You should get the opportunity to hear about the adviser’s experience, the kind of people they advise, the kind of financial products they advise on, and their qualifications.
Pay attention to important clues about the adviser. Do they:
- make you feel comfortable about asking questions?
- encourage you to take your time?
- want to understand your situation thoroughly before giving any advice?
Being talked at, put under pressure or told there’s only one right way to do things is not a good sign. You’re looking for an adviser, not a salesperson.
Questions to ask
Get the adviser to do most of the talking but keep them to the point. Ask open questions like ‘what experience do you have?’, and avoid questions that just have a yes or no answer. Ask about anything you feel unsure of.
Here are some suggested questions to keep the conversation going, with some comments about what to listen for. Choose one or two from each section, as you may not have time to ask them all.
How to decide
After you’ve met all your possible advisers, compare how each adviser answered your questions. Note each adviser’s strong and weak points. Score each adviser from 1 to 5 against each heading on our list of ‘what you need’.
Give a score for how you feel overall about being free to ask questions and whether you got a clear answer. Feeling pressured or uneasy can be warning signs that an adviser won’t work out for you. See who gets the highest score.
Remember you’re comparing advisers, not comparing their advice.
More about getting financial advice
FIDO Website: Printed 09/03/2010
