How do I choose a financial adviser?
Choose a financial adviser who is registered, licensed and qualified, explains their fees in dollars, and takes the time to understand your goals before recommending anything. In WA and across Australia, you can check most of this yourself in a few minutes.
In brief
Check the adviser on the Financial Advisers Register before your first meeting.
Only qualified, registered advisers can call themselves a financial adviser or financial planner in Australia.
Ask for the Financial Services Guide (FSG). It sets out services, fees and any links to product providers.
Personal advice comes in writing, in a Statement of Advice (SOA), and must be in your best interests.
You don't need $500,000 to get advice. Many advisers offer advice on a single issue.
The rules are national, so they protect you the same way in Perth, Sydney or anywhere else.
In this article
In this article, John Bartle, Director and Senior Financial Adviser at Aspire2 Wealth, explains how to choose a financial adviser in Perth or anywhere in Australia, and what to check before you sign anything.
Most people who sit down with me for the first time have the same worry: how do I know I can trust this person? It's the right question. You may have read my article What does a financial adviser do?, which explains what good advice covers. This article is about the step before that: choosing who to sit down with.
How do I check a financial adviser is legitimate?
Start with the Financial Advisers Register on Moneysmart, run by the Australian Securities and Investments Commission (ASIC). It shows whether an adviser is authorised, which products and areas they can advise on, their qualifications and the licensee they work under.
You can search by postcode. In Perth, for example, try 6005 for West Perth or your own suburb. The results are randomised, not ranked, so the order tells you nothing about quality. The register works the same way in every state and territory.
Then check the adviser's website and Financial Services Guide. Do their services match what you need, such as retirement planning, aged care or estate planning?
What qualifications must a financial adviser have?
In Australia, a person can only call themselves a financial adviser or financial planner if they meet the profession's standards and are allowed to give personal advice to retail clients, according to ASIC.
Under ASIC's professional standards, advisers who give personal advice must:
meet the qualifications standard
pass the financial adviser exam
complete 40 hours of continuing professional development each year
comply with the Code of Ethics.
These standards are national. A registered adviser in WA meets the same bar as one in Victoria or Queensland.
What should a financial adviser give me in writing?
A Financial Services Guide (FSG). This explains the adviser's services, fees, any commissions, how they handle complaints and any links to financial products. Moneysmart says an adviser should give you one without hesitation.
A Statement of Advice (SOA). If you get personal advice, the SOA explains the strategies and products recommended to you, and sets out the fees for the first year.
Personal advice must take your circumstances into account, including your income, expenses, assets, debts, goals and attitude to risk. Advisers who give personal advice must act in your best interests, according to Moneysmart.
How much does financial advice cost?
Fees vary between advisers, so ask for them in dollars before you agree to anything. Common adviser fees, according to Moneysmart, include:
A Statement of Advice fee to prepare your written advice
An implementation fee to put the advice in place
An ongoing advice fee for regular reviews and support
An hourly rate or a review fee for one-off questions or plan reviews.
Product fees, such as platform and investment management fees, are charged on top. If you agree to ongoing fees, you must give written consent each year, and you can end the arrangement at any time.
Weighing up whether advice is worth it? Our article How to navigate financial advice looks at the value against the cost.
Do I need $500,000 to see a financial adviser?
No. The law sets no minimum. Some advisers do set minimum balances, so ask at the start. Others give advice on a single issue, such as your super, a home loan, retirement or a parent's move into aged care.
First meetings are usually free, according to Moneysmart. Use that meeting to see whether the adviser listens and explains things clearly.
What should I ask before I commit?
Are you on the Financial Advisers Register, and which areas can you advise on?
What will I pay up front, each year and in total, in dollars?
Do you receive commissions or incentives, and do you have links to any product providers?
How do you choose the products you recommend?
How often will we meet, and what will I receive in writing?
Who looks after me when you're away?
How do I end the agreement, and is there a notice period or penalty?
A good adviser gets to know you before giving personal advice, and gives you time to think before you decide. Be wary of anyone who contacts you after you click an online ad or quiz and pushes you to act quickly.
What if something goes wrong?
Talk to your adviser. Explain your concern and ask how they will fix it.
Make a complaint to their licensee. The FSG explains how.
Contact the Australian Financial Complaints Authority (AFCA). It's a free, independent service if you're not happy with the response, according to Moneysmart.
How do I get the most from working with an adviser?
Be open. Share your full picture, including debts and worries.
Set clear goals. Tell your adviser when your life or priorities change.
Ask questions. A good adviser is happy to explain anything twice.
Review regularly. Meet at least once a year, and after any big change.
Common questions
Is a financial planner the same as a financial adviser?
Yes, in practice. In Australia, both titles are restricted to people who meet the profession's standards and can give personal advice to retail clients.
Does my adviser need to be in WA?
No. The rules are national, so a registered adviser can advise you wherever you live. Many people still prefer someone local they can meet face to face, especially for property, estate planning or aged care.
Can I get advice through my super fund?
Many super funds offer advice, usually about your account with them. An adviser can look at your whole picture, including super, investments, insurance and estate planning.
How do I check an adviser's qualifications?
Search their name on the Financial Advisers Register. It lists their qualifications, the areas they can advise on and the licensee they work under.
Book a complimentary consultation
Choosing an adviser is a big decision, so start with a conversation. Call our team on (08) 9322 7029 or book a complimentary consultation with John. You can also read about our retirement planning and investment advice.
Sources
Moneysmart, Choosing a financial adviser
Moneysmart, Financial advisers register
Moneysmart, Financial advice costs
Moneysmart, General and personal financial advice
Moneysmart, Problems with a financial adviser
Australian Securities and Investments Commission, Professional standards
Australian Securities and Investments Commission, Definitions that apply to personal advice providers
Aspire2 Wealth Advisers Pty Ltd ABN 42 125 897 903 is an authorised representative and credit representative of Charter Financial Planning Limited ABN 35 002 976 294, AFSL and Australian Credit Licence No. 234665. This website contains information that is general in nature. It does not take into account the objectives, financial situation, or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.
