When you are on the lookout for partnering up with a financial adviser, make sure you ask them some of these questions before you commit to anything. AND most importantly that the answers they provide resonate with your unique values and goals.
How do you get paid? Do you get commissions or volume bonuses?
(A volume bonus is where the product provider will pay your financial adviser a percentage of the total amount of funds under their management).
Do you have a stake in any of the products you recommend?
→ This is important because it may help you understand if they are incentivized to recommend a particular product to you. The product may very well be in your best interests, but it is also worth noting whether or not your adviser benefits from the product as well.
How much experience do you have?
→ If you’re going to be paying someone to recommend how you should spend your money, how important is it to you that they are experienced in their line of work? Are you okay with someone that has 3-5 year’s experience AND charging the same as someone with 15+ experience? Think about your own morals and values at work. How does this sit with you? When a financial adviser tells you they have delivered results, the ‘proof is in the pudding!’ What results were delivered in their years of experience.
Who are you licensed with? And how long have they been around?
→ In order for financial advisers to give advice to you, they need to be authorised by an AFSL (Australian Financial Services Licensee) through ASIC. Do your research on the AFSL. Understand how long have they been around and if they have had any complaints or enforceable undertakings. If so, what was the case and the outcome?Â
What qualifications do you have?
→ This helps you understand a little more about your financial adviser’s background. How committed are they to the financial planning industry and keeping up to date in terms with education in their field.
What happens if something happens to you?
→ This helps you understand who will look after you if anything happens to your financial adviser?
How many clients do you look after? What’s the cap?Â
→ This is important because it gives you an idea on how accessible your financial adviser is to you and how much time they can devote to you as an individual. Think about it! Say your adviser is seeing a large number of clients, maybe 180 or 200 people a year, how much of each individual client’s unique situation and information can they possibly retain??Â
Tell me about the team behind you? What’s their experience? Our commitment is to keep jobs in Australia.
→ This helps you gather information on who is working with you and your financial adviser. Who has access to your information and what is their experience and background with regards to financial planning.
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