Taking On A Financial Adviser

Important Factors To Consider Before Taking On A Financial Adviser

Many investors seek assistance with their financial decisions by engaging the help of a professional financial adviser to guide their decisions and make suitable investments according to their requirements. An adviser will provide you with personalised strategies that are designed specifically for your finances that suit your circumstances.

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Unfortunately for investors, there are many unethical financial advisers out there that give negligent advice for their own gain, leading to devastating financial outcomes for their clients. If you are seeking financial advice, we have put together the following guide to help you understand all of the factors that come into consideration before taking on a financial adviser.


Why Do I Need A Financial Adviser?

The reason that so many investors seek the help of a financial adviser is that they actively help you reach your financial goals by using their expertise in the market. Financial Advisers have a vast knowledge of investment patterns and are well equipped in providing you realistic options to achieve your financial goals. Proper financial advice can fast track you on the road to success in the following areas:

  • Gaining control and understanding of your finances
  • Appropriate planning for the next stages of your life such as starting a family
  • Protecting your finances and your future
  • Minimising bad decisions and poor financial outcomes
  • Setting and Achieving the financial goals which you have always dreamed of

How Can A Financial Adviser Help Me Reach My Financial Goals?

In regards to your personal finances, financial advisers take into account your lifestyle and current situation in order to personalise your goals. They will ask the appropriate questions in order to create an accurate financial profile which will reflect your investment needs. Before you meet with an adviser, it’s important to ask yourself some questions that will help you reflect on your overall financial goals. These questions include:

  • How much money do you owe to lenders?
  • How much of your own money do you have to invest
  • How much risk are you willing to take in your investments?
  • How long do you want to invest your money for?

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How Much Will A Financial Adviser Cost Me?

Before you rush to seek financial advice, it’s important that you understand the costs associated with the service and whether or not it’s worth it for you personally. Financial advice can be an ongoing service or a one-time piece of advice. One-time advice may involve a focus on a certain issue such as mortgage repayments or superannuation strategies. Ongoing advice usually involves regular consultations and reviews who monitor your continual financial growth. Whether you receive ongoing advice or a one-off consultation, you are required to pay for your financial adviser for their recommendations whether you follow through with their advice or not.

To avoid any confusion or misunderstandings, request that your financial adviser invoices their services in a dollar amount rather than a percentage of investment.

How Can I Find My Financial Advisers Certifications?

Before you take on a financial adviser, we recommend that you do the necessary research to ensure that you are dealing with a reputable and reliable professional. Unfortunately, there are a number of dishonest and unethical financial advisers who practice in Australia everyday. For this reason we urge you to cross reference your potential adviser with ASIC’s Financial Advisers Register which allows you to verify your advisers credentials and protect yourself from negligent advice.

To find out more about your advisers record and performance history, the best method is to simply ask them. By hearing what they have to say you can assess for yourself whether or not they are right for you. If they immediately guarantee a return on your investments, they have broken the law and should be avoided. No financial adviser can guarantee any results for you. If it sounds too good to be true, it usually is.

Another good indication of the reliability of your potential financial adviser is their existing client base. What kind of clients does your adviser specialise in? Take into consideration the age and financial aspects of their clients before you seek advice from them as they may not have experience with achieving goals that align with yours.


Review All Financial Advice Before Following Through

After first consulting with your financial adviser, you should review the following documents and understand their contents before making any financial commitments or decisions.

  • PDS (Product Disclosure Statement): For each product that is recommended, a PDS should be issued to describe the features or the product.
  • SOA (Statement Of Advice): This is the document which outlines the advice which has been recommended to you and why it suits you personally.

If at any stage you are unsure of the steps being taken, you should ask your adviser to clarify your issues as soon as they arise. The most important step to take is to make sure that all of your advisers recommendations meet your financial capabilities and do not put you in a high level of risk, but rather help your appropriately achieve your goals.

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