4 GETTING THE RIGHT ADVICE The eight steps to finding a ... · either don’t trust them or don’t...

4 GETTING THE RIGHT ADVICE August 25, 2014

The team at The WestAustralian’s Your Moneypersonal finance section is

regularly asked one question.It’s not about asset allocation,

or how much super you cansalary sacrifice, or the cut-offpoint for receiving the agepension.

It’s this: Where can I find agood financial adviser?

What’s worrying is that manyof the people asking us fordirection on this point have anadviser or planner but they

either don’t trust them or don’tfeel they are getting value formoney. Unfortunately, finding agood financial adviser is harderthan finding a good doctor.

At least when you go lookingfor a new GP you know that alldoctors in WA need to beregistered to a board that hasrigorous standards. Not so forthe financial advice industry.

Michael Gething, WA regionalcommissioner with theAustralian Securities andInvestments Commission, hastold investors looking for a newadviser to remember that as the

client, they are in charge.“Remember, you’re effectively

interviewing planners for thejob of assisting you with yourfinances — it’s your money andyou have the power to select orreject a planner,” Mr Gethingsaid.

“Doing some homework firstis vital and you’ll find that bytaking that approach, many willbe weeded out even before thefirst interview.”

The good news is there are afew basic things you can do tominimise your chance of gettinglumped with a ratbag.

The eight steps tofinding a planner

If you need a painter or amechanic, there’s a goodchance you will ask friends andfamily for a recommendation.Don’t be shy in asking themwhether they have a financialadviser they are happy with.Just make sure the person theyrecommend has been providingadvice for more than a coupleof years — you don’t want afly-by-nighter. Ask youraccountant as well.

Don’t reinvent the wheel

1

Make sure a prospectiveplanner has clients similar toyou. Planners specialise, so ifyou are a public servant in your40s with kids at home and ahuge mortgage, don’t sign upwith someone who billsthemselves as an expert inself-funded retirees or smallbusiness people.

Determine who the planner really works for. Allroads tend to lead to Rome in the financial planning

industry — Rome being the Big Four banks. Don’t besurprised if the seemingly independent suburban planning outfityou walk into is actually a subsidiary of ANZ or NAB. There’snothing wrong with this — there are many planners who have linksto the big banks and deliver great service to their clients. But beaware there may be a bias to push you into a suite of productswhich are delivered by the parent company. Again, this is notnecessarily a bad thing, because these products are often the beston the market. But go in with your eyes open.

Transparency3

It wasn’t that long ago that you could jump on theinternet, fill out a questionnaire and walk away beingable to tell the world, without lying, that you were a qualifiedfinancial adviser. Things have tightened up a bit but ideally youradviser should have a commerce or business degree in addition toan industry qualification. A B.Com, B.Bus or B.Econ means theyshould know the law, accounting, economics and financialmathematics. Industry qualifications such as Dip FP, ASIA and DipFS indicate that the adviser has been taught and passed subjectsuniquely associated with financial planning. Full membership ofprofessional associations indicated by letters such as CPA, CFP,ASIA or ICA indicate that in addition to complying with the legalrequirements, they are bound by professional rules of conductwith serious penalties for breaches.

Qualifications 42Find common ground

■ Ben Harvey and Nick Bruining