Choosing a good financial adviser
Tough economic times are forcing many of us to start taking a more serious look at our finances and getting a financial adviser onboard can be a very important part of that. But making sure you get the right one is vital. Currently almost anyone can purport to offer financial advice ? regardless of how much training or experience they have. There is also no-one to complain to if you think you have been given duff advice, unless your adviser is part of a professional organisation or you take it through the court system. All this is set to change next year, but until then it is up to you to make sure you get the best man or woman for the job. What is required of an adviser currently is that they disclose to you - in writing- certain things before you take them on. This is known as a disclosure statement and should cover things like: their experience and qualifications (Certified Financial Planner (CFP) and Chartered Life Underwriter (CLU) are the qualification pinnacles); whether they have any criminal convictions; what types of investments they advise on; what fees they charge; whether they have professional indemnity insurance; what professional memberships they have; any potential conflicts of interest; and any relationships they have that could influence their advice. Lyn McMorran, president of the Institute of Financial Advisers (IFA), says if they do not offer you a disclosure document, walk away. While it is hard to find a truly independent financial adviser, check out how upfront they are about the relationships they do have with other financial organisations such as product providers, McMorran suggests. Also, any advice they give you needs to be in writing ? but not a great wad of paper that you cannot understand. ?If they start talking to you in language you don?t understand as a client, trying to blind you with science and show how clever they are, walk away and find another one,? McMorran says. Other points to check out include: * What are the adviser?s areas of speciality ? do they cover everything, or can they refer you to someone else for other areas? * How transparent are they about the fees or commission they receive and charge and will they talk you through why they make the recommendations they do? * Do they look as though they put the client?s interests ahead of their own? * What would happen if they could no longer be your financial adviser? * Do they have any testimonials from other clients and could you speak to some of them about their experience? * Do you feel comfortable with them? Although they need not be your best friend ? it is the results that count. Your role as the client is to be as open and honest as you can so your adviser can achieve the best possible results for you and your finances. Do not try and ?fudge? anything, such as trying to hide any debts. ?The advice is only as good as the information you put in,? McMorran says. To find an adviser, check out the Institute of Financial Advisers website at www.ifa.org.nz or the Society of Financial Advisers at www.sifa.org.nz. This information is of a generic nature and does not constitute financial advice. No liability will be accepted for losses following on from its use.
