Working with the right financial advisor from the start can be incredibly important to make the most of your financial life. Your Financial Advisor will play a significant role in your financial well-being so taking the time to ask a few questions can be a worthy investment of time.
A Financial Advisor that you can relate to, and you can have a good working relationship with, is key.
Here are some important questions to ask a potential financial advisor before appointing them:
What are your qualifications and associations?
You should get an understanding of what professional organisations the business is affiliated with, for example do they hold a membership with the Financial Advice Association of Australia (FAAA). You should also enquire as to what qualifications the Financial Advisor has e.g., Certified Financial Planner (CFP), relevant degree’s or similar.
How long have you been in the financial advisory business?
Experience equally can be a valuable indicator of an adviser’s expertise and ability to navigate different financial circumstances. Understanding the advice team around you and back up options if your adviser retires can allow you comfort that your future plans are looked after.
What is your approach to financial planning and advice?
Understand the firm’s philosophy and their approach is needed to ensure they align with your financial goals together with your Purpose and Legacy needs.
How are you compensated?
Ask about their fee structure. Make sure you understand the total cost of their services and that it is quoted upfront and is a fixed fee. Understanding if the adviser or firm are paid any conflicted remuneration like commissions or incentives.
Are you held to a fiduciary standard?
A fiduciary is legally obligated to act in your best interests. Ensure your adviser is committed to this standard such as what is required to be a member of the Financial Advice Association of Australia (FAAA)
What is your investment philosophy?
Understand how they approach investing, including asset allocation, risk management, and their views on long-term versus short-term strategies.
How do you deliver your advice?
Every firm is different but ensuring the advice is clear, compliant and easy to understand is important. Too many times an advice document may be 80 pages long and is too complex to read in its entirety.
What happens after you have delivered the advice?
Clarify around what is next and the ongoing engagement, if required, should be provided in writing and understood. Every client is different, and you want to make sure it is not the same service for all. You also need to ensure that it is tailored to what you need.
Can you look after my kids and provide generational advice?
One of the missed area’s is the generational aspect of advice to get the best family outcome. An advice firm should be able to accommodate advisers that ae suited to your whole family and regarding financial education and advice for your children, a younger adviser may foster a better relationship.
How do you handle conflicts of interest?
Ask how they manage potential conflicts that could arise from their compensation structure or relationships with financial product providers.
What is your specialty or niche?
Some advisers specialise in certain areas, such as advice to professional families, family business, retirement planning, estate planning, or socially responsible investing. Ensuring their expertise aligns with your needs and should you have broad requirements, that the firm has these covered for you.
Asking these questions will help you assess the adviser’s qualifications, approach, and compatibility with your financial goals, what’s important to you including your purpose and legacy needs. First and foremost, there needs to be a good working relationship and a level of comfort that they understand you and what you want to achieve.
To see if one of our team is the right Financial Advisor for you, please contact our office to make an appointment.