Searching for a financial adviser can be surprisingly difficult.
Google “financial advisor Melbourne” and you will quickly discover that almost everyone is experienced, trusted, client focused, strategic, holistic and passionate. Apparently nobody in financial planning is merely “quite competent and generally pleasant”. So how do you actually choose?
A good starting point is to ignore the slogans and look at how the business operates.
Start with ownership
Who owns the financial planning business?
Some firms are independently owned. Others may be connected to larger financial institutions, product providers or dealer groups. Ownership does not automatically determine the quality of the advice, but it is useful information. Clients should understand whether there are commercial relationships sitting behind the advice process. An independent financial planner can often operate with greater freedom when comparing strategies, investments, superannuation products and insurers.
Understand the fee structure
Ask what the advice costs.
Not roughly.
Not “from”.
Not “depending on circumstances”.
Ask what you are likely to pay and what you receive in return. Good financial planning should have a clear scope. The adviser should explain what work will be completed, how much it will cost and whether there are any ongoing fees. An independent financial advisor should also be able to explain whether they receive any commissions or product-related payments. At Partners in Planning, we do not accept commissions on insurance. We believe clients should pay us for advice. It is wonderfully old-fashioned.
Look for experience, not theatre
Qualifications matter.
Experience matters.
Technical knowledge matters.
But so does the ability to explain financial concepts without making the client feel as though they have
wandered into an economics lecture by mistake.
A good certified financial advisor Melbourne clients trust should be able to explain:
What you own.
Why you own it.
What it costs.
What could go wrong.
What happens next.
If you leave the meeting more confused than when you arrived, something has gone wrong.
The best adviser relationship should feel clear
Good financial advice is not about making simple things sound complicated.
It is often the opposite.
Retirement, superannuation, investments, insurance and tax can all involve complex rules.
The adviser’s job is to sort through the complexity and give the client a clear path forward.
You should understand the strategy.
You should understand the fees.
You should understand the risks.
And you should understand why the recommendation is being made.
That is a far better test of a financial adviser than how impressive their website looks.
Although, for the record, we quite like ours.