How to Choose a Financial Planner

​Research shows that nearly two million Australians currently use a financial advisor or planner. Are you looking to join their ranks?

If so, you know that this isn't a decision to rush into lightly. Selecting a team to help manage your money is one of the most important steps you can take to help protect and preserve your financial future.

As you begin this new journey, it's important to understand the features to look for in a prospective advisor. You should also know the right questions to ask and the resources to use.

Today, we're sharing all of these details and more. Read on to learn how to choose a financial advisor that meets your needs.

1. Consider Your Financial Goals
Before you begin researching your options for the best personal financial advisor, it's important to conduct some self-analysis. Specifically, what do you hope to get out of financial advice?

There is no one-size-fits-all answer. Rather, yours will hinge on a few factors, including:

  • Your age
  • The amount of money you own
  • Your personal finance goals

There are myriad services that a financial advisor can provide. These range from budgeting and investing advice to estate planning and tax guidance. You might require all of this support or just a fraction of it.

2. Determine the Advice You Need

Once you know the goals you want to achieve from financial planning, you can begin narrowing down your list of potential advisors. To do so, you'll need to determine which kind of advice you're seeking.

General vs. Personal Financial Advice
Are you simply looking for basic, overarching guidance on a given topic? For instance, you might want someone to help explain a complicated tax law to you. If so, you need general financial advice.

When you pursue this kind of help from an advisor, they won't take into account your personal situation. Rather, you'll receive the facts as they are, usually without a tailored approach. On the other hand, you can also request personal financial advice.

If you go this route, the guidance you receive will not be generic. Instead, your advisor will recommend certain options and help you navigate specific processes based on your personal financial situation. The advice you receive will be in your best interest and is designed to help you reach your short-term and long-term goals.

There are three different types of personal financial advice you can pursue. Let's take a look at what each one entails.

Single-Issue Advice

This type of advice is similar to general financial advice, yet with a personalized approach. If you only have a few questions and aren't looking for an ongoing advisor relationship, you can contact one to ask simple inquiries.

For instance, you might inherit shares when a loved one passes away, and you aren't sure what to do with them. In this case, a personal financial advisor can take a look at the surrounding situation and help advise you on a way forward.

Comprehensive Advice
Especially if you've never worked with an advisor before, you might require comprehensive advice to begin. With this approach, you'll work one-on-one with a finance professional to develop your goals and create a plan to reach them.

From savings and insurance to retirement planning, you'll cover all of the major touchpoints and devise a solid plan.

Long-Term, Ongoing Advice
Once you have your financial plans in place, you'll still require regular meetings with your advisor. During these meetings, you'll check in on your accounts, update your plan as necessary and manage your financial affairs.

Lately, it might seem as though every service is going digital. This includes financial services.

In short, robo-advice is automated advice provided by an online chatbot. To receive it, you'll enter a few key personal details, as well as your risk tolerance and investment goals. Then, you'll receive guidance based on machine-driven algorithms.

While this can be a cost-effective and convenient tool when you're looking for a quick answer, it isn't recommended as a long-term solution. Not only are the service options narrower than you'd find with an in-person advisor, but it also offers limited flexibility.

Whereas an actual advisor can help you set goals and objectives, most robo-advice programs aren't designed to do so. Moreover, most complex financial situations are beyond the realm of their capacity.

3. Research Your Local Options
When you've decided on the type of financial advice you require, you can start researching and interviewing local professionals in your area.

At this juncture, it's criticalto note that anyone who provides financial advice to another must hold a valid and up-to-date licence with the Australian Financial Services (AFS). This is required to conduct any form of financial services throughout Australia.

If you're unsure about someone's credentials, you can look them up on the Financial Advisers Register. This is an online database provided and managed by the Australian Securities and Investments Commission (ASIC), published on the government's Money Smart website.

With a few clicks, you can find out a wide range of information about any given financial advisor, including:

  • Where they have worked
  • Professional memberships they're in
  • Their industry qualifications
  • Their industry certifications (e.g. Certified Financial Planner)
  • The training they have completed
  • Which financial products they're qualified to advise on

This is an excellent way to make sure that the person you're considering is not only licenced but has the industry experience and qualifications required to provide expert financial advice.

Personal Recommendations

Of course, one of the most viable ways to find an advisor you can trust is to ask your friends, family members and colleagues who they would recommend.

Have they worked with someone in the past who provided sound, reliable guidance? Or, can they steer you away from someone in particular? Remember that someone's personal experience is not necessarily an indication of the way yours will go. Still, it helps to have a benchmark as you do your due diligence and explore all of your options.

Professional Associations

In addition to asking your inner circle, you can also find trustworthy and experienced financial advisors by looking into professional associations. In Australia, two of the most prominent ones include the:

In addition to these resources, you can also ask your lender or current financial institution if they have any advisors whom they'd recommend. In many cases, they'll work closely with these professionals and can direct you to some of the most well-known and respected names in your community. You can also check with your super fund for the same guidance.

4. Understand the Terms
Before signing on the dotted line and agreeing to do business with a financial advisor, it's important to make sure that you understand the fine-print details, first.

Your advisor should present you with a comprehensive Financial Services Guide (FSG) to help you understand the exact services that will be provided under your partnership. Many advisors will include their FSG clearly as a link or downloadable PDF on their website.

If you cannot locate it, besure to ask for a copy. Then, read it carefully before taking your next step. The different details you can glean from this document include:

  • The advisor's AFS licence number
  • The financial services they offer
  • Their pricing and fee structure
  • Links to their product providers

Here, you can also verify if you're working with an independent financial advisor or one who works for a greater company. If it's the latter, the company owner will be included in the FSG.

5. Ask Key Questions
By this point, you should have a short list of prospective advisors who check all the right boxes and come highly recommended. Your final step is to conduct a short interview with each one. This can be over the phone or in person.

The key questions to ask at this time include:

  • What are your qualifications and specialty areas?
  • Who comprises your primary client base?
  • What fees do you charge for your services?
  • How often will we meet?
  • Will you consult me on decisions? If so, how?
  • How will you recommend, monitor and manage my investments?
  • How will you choose financial products to recommend? Is it based off incentives or commissions?

These are only a few of the inquiries that can help you learn more about the advisor's plan and approach. You should feel comfortable spending as much time as possible during this step. If you feel rushed for any reason, consider that a red flag and continue your search elsewhere.

Find the Best Financial Advisor for Your Needs
When you're ready to partner with a financial advisor, you want to know that you made the right decision. Yet, with so many factors at play, it might feel difficult to choose someone with confidence.

We're here to make the decision easy for you.

We've compiled a list of the top 10 financial advisors in each capital city of Australia. The professionals we've selected are all Certified Financial Planners with a minimum of five years of experience in the industry. They're also recognized by the FPA, as well as the Australian Financial Review (AFR).

When you want to cut straight to the best in your area, take a look at the different cities on our websites! You can find us in the following locations:

​Click on the name of your city to learn more about the services we provide. We look forward to connecting with you!