Selecting a financial adviser

The growing complexity in legislation, insurance and investment markets mean it's becoming increasingly difficult to make the right financial choices without professional advice.

By consulting an experienced financial adviser, you can actively plan for your future rather than leaving it to chance. How do you find yourself a financial adviser who is qualified to meet your needs?

As a first step, ask your friends, colleagues or the personnel section of your work if they can recommend a financial adviser to you. Take your time. The selection of an adviser is a very important decision and needs your careful consideration.

It is your right (and responsibility) to ensure the financial adviser has the background, expertise and methods of operation to suit your needs. When selecting a financial adviser, you should ensure you know how your adviser measures up in the following areas:

• The financial adviser should be an Australian Financial Services Licensee or an Authorised Representative of one (or more) financial institutions. You should ask to see their licence to act for a financial institution
• Your financial adviser should be a member of their national body, such as the Financial Planning Association (FPA) or the Association of Financial Advisers (AFA). These are the national bodies for the finanical advisers and have the authority to investigate complaints and to discipline their members who must abide by a code of ethics and rules of professional conduct.
• The adviser should be bound by a code of ethics (of their national body) which reinforces ethical behaviour and service levels.
• The adviser should be accredited to provide advice at the level you require. There are a range of qualifications and accreditation's within the financial industry. These range across the insurance, investment and home lending markets. Ask your prospective financial adviser, what qualifications they have and in what areas they are qualified to give you advice.
• Because your financial plan is the key to your future security, it should be a living and evolving plan, capable of accommodating change. Ensure your financial adviser offers you ongoing and long term service.
• Before you commit to any financial plan, the proposed strategy should be provided in writing and be fully understood by yourself.
• It is essential to understand how the financial adviser will be paid, and what services will be provided for this service. Advisers can receive benefits from your investment in a number of ways including: charging fees for the work done (fee for service); receive commission (or brokerage) from the financial institution; charge a scale of fees based on the total funds you invest; or a combination of fees and commissions.