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INSIGHTS WITH EVALESCO

The importance of choosing a qualified and registered financial adviser
by Kate Ferraro | 21 December 2020

TOPICS DISCUSSED

How to choose a financial planner?
Questions to ask a financial planner
The importance of having a financial planner

The recent news about the alleged misconduct of a “financial adviser” in allegedly defrauding millions from clients is horrible. For those who have lost, or stand to lose, so much of their hard-earned money the toll on their mental health and their families wellbeing is unimaginable. This sort of thing just should not happen.

What is often, frustratingly, overlooked in the media coverage is, in this recent instance and others like this, the individual purporting to be a financial adviser is not currently licensed to provide financial advice. They never have been.

There may have been clues that could’ve helped these people avoid these terrible circumstances. Did you know that anyone who gives financial advice in Australia must operate under an Australian Financial Services Licence, and be registered with ASIC?

Unfortunately, it’s too late for any tips to assist those investors that have already been duped and we hope the regulators and courts will assist them with a fair outcome and justice will be served.

We’d hate for headlines like these to deter people from seeking financial advice.  But, at this point, it is fair to ask why get financial advice?

There has been a lot of research into the value of financial advice with common findings showing advised clients experience an increase in confidence in their financial wellbeing, less financial stress and greater peace of mind with regards to their financial future when compared to non-advised consumers.

A 2015 white paper from IOOF on ‘The True Value of Advice’, found that those who receive ongoing financial advice are 22% more likely to feel as though they are living their ideal life.

When it comes to getting financial advice, the value is clear when you can find someone you trust to work with.

So how do you choose a financial planner?

Like choosing any service provider, it can be helpful to start your search by getting a referral from family, a friend or colleague.

It is important to check that they’re registered with ASIC and have a current licence. You can use the ASIC financial planner register to double check a prospective planner’s qualifications, experience and work history.

The financial planners register gives you information on:

  • The financial planner’s areas of expertise
  • Their industry body membership
  • Their Australian Financial Services Licence (AFSL)
  • Whether the planner has had complaints or received disciplinary action in the past

Don’t do business with a financial planner, financial adviser, investment advisor, or broker, without first checking and verifying their credentials.

Registered financial advisers operate in a heavily regulated area. The regulation is ultimately aimed at maximising the protection of consumers. The advisers must abide by a code of ethics, meet minimum education standards, have professional indemnity insurance and are heavily scrutinised by ASIC. By ensuring the adviser you choose to work with is properly authorised you are increasing the oversight on the advice that you are provided and the protection you have if something goes wrong. Which means there is less chance of it ending badly for you.

Once you’ve confirmed the bona fides of the adviser, the next important step is to arrange to meet face to face (or via Zoom in current times). You can investigate the services offered by an adviser, prior to the meeting, by requesting a copy of the planner’s Financial Services Guide. This outlines fees, services and whether the planner gets paid commissions or is associated with any financial institutions such as banks.

When you first meet an adviser, ask them about:

  • Their qualifications, main client base, and specialty areas
  • What fees you will pay, how often and what you’ll get in return
  • How they’ll manage your moneyHow often you’ll meet
  • What information you’ll receive and how often
  • How they’ll consult you on decisions
  • How they’ll monitor and manage your investments
  • What commissions or incentives they receive from financial products, and how they’ll choose products to recommend to you?
  • Who’ll look after your account when they’re away
  • How they’ll deal with complaints
  • How to end your agreement with them (including any penalties or notice periods)

A good financial adviser will work with you to understand your needs, set your financial goals, and create a plan to help you achieve them. If you don’t feel the adviser is addressing these points or is able to answer your questions satisfactorily, then it may be best to move on.

Having someone you can work with as a trusted adviser is imperative to maximise your financial wellbeing. Hopefully the tips provided here will help you find the right adviser for you.

Sources

(1) IOOF White Paper – The true value of advice Dec 2015

(2) AFA White Paper – Money Well-being and the Role of Financial Advice May 2016

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“How will I measure the value or success of receiving financial advice?”

We believe the true value of financial advice isn’t found in dollars and cents (although this is important too!) but in the peace of mind a financial plan can provide. It’s knowing where you want to go and how to get there, with a dedicated team behind you every step of the way.

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“How do I know Evalesco is the right fit for me?”

We know the impact of good holistic financial advice can make and we have the life experience, technical capability and quality support team that can make that difference for you. We’ve empowered over 1000 families through the delivery of great financial advice, to be healthy, wealthy and happy.

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“How do I know how much money I will need to retire?”

The amount of super you’ll need when you retire depends on your big costs in retirement and the lifestyle you want. The Associate of Superannuation Funds of Australia (ASFA) estimates for a single $44,224 a year and for couples $62,562 a year is how much you may need. This is only an indicator and our advisers assess everyone’s individual circumstances.

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“Why should I pay for financial advice?”

The fees we charge for financial advice is only a fraction of the value we derive for our clients, meaning our clients are always better off after seeing us. Rarely do we encounter a new client invested appropriately for their needs, with adequate risk protection, structuring and estate planning provisions in place. Even small tweaks to a financial plan over a long period of time can result in drastically better outcomes for our clients which eclipses the fees of the financial advice. Additionally, you can opt-out of an ongoing fee arrangement at any time.

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“How do you charge for your services?”

In our discovery meeting with you our advisers discuss the initial advice fee and the ongoing fees associated with our services.

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“What is the process for getting our own personal financial plan?”

After our initial phone call to discuss why you are seeking a financial adviser, we arrange a discovery meeting that outlines what is important to you, your current position, our areas of advice, our approach. We then present a Statement of Advice (SoA) to discuss your goals and our recommendations and go through the steps of how to proceed to the implementation stage. After signing the SoA, we discuss your questions, get you to sign the authority to proceed and complete any application forms before implementing the recommendations detailed in the SoA.

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“Should I pay more off my mortgage or put more money into super?”

One thing to consider is the interest rate on your home loan in comparison to the rate of return on your super fund. Before making a decision, it’s also important to weigh up your stage in life, particularly your age and your appetite for risk. Whatever strategy you choose you’ll need to regularly review your options if you’re making regular voluntary super contributions or extra mortgage repayments. As bank interest rates move and markets fluctuate, the strategy you choose today may be different from the one that is right for you in the future

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Evalesco Financial Services Level 17, 20 Bond Street Sydney NSW 2000
Phone: (02) 9232 6800

The information provided on and made available through this website does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you obtain your own independent professional advice before making any decision in relation to your particular requirements or circumstances. Evalesco Financial Services do not warrant the accuracy, completeness or currency of the information provided on and made available through this website. Past performance of any product discussed on this website is not indicative of future performance. Copyright © 2019 Evalesco Financial Services. All rights reserved

Evalesco Financial Services Pty Ltd is a Corporate Authorised Representative (325313) of Australian Advice Network Pty Ltd.

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