Top 10 questions to ask your financial planner

The following is an extract from the Financial Planning Association website on issues to be canvassed with a prospective financial planner

An initial enquiry would be to seek details of the adviser’s qualifications and whether he/she is a member of a professional organisation eg Chartered Accountant/Certified Practising Accountant, /Lawyer or member of the FPA or any other body which has a code of ethics upon which you can rely. Also enquire as to the level of professional indemnity cover available in the case of a dispute.

The FPA article included the following non-exclusive list of prompts the answers to which you should be very clear.

1. Can I see your Financial Services Guide (FSG?)

   This document explains the nature of financial services being offered, fees and commissions charged and how the adviser deals with complaints. An FSG must be provided –by law-before providing any financial advice. All advice must be in writing.

2. How long have you been a Financial Planner?

   If less than two years, consider asking someone more experienced within the firm to review the advice.

3. What is your speciality

   If not a specialist in all areas, ask whether you will be referred to another adviser for those specialist needs.

4. What kind of clients do you mostly see?

   Is this adviser in tune with your lifestyle and needs?
   Does he/she work with clients similar to you?

5. How do you charge for your services?

   The planner should give you an estimate based on the work required and must by law detail income receivable from performing such work (eg commissions). You must know when payment is expected.

6. Will I receive written advice

   Any advice given must be in writing via a Statement of Advice (SOA) which must
   • Be clearly stated
   • Indicate how he/she is being paid, including commissions.
   • Outline the basis off information on which the advice is prepared
   • State the associations / relationships which may influence any decision-making.

7. How often is the advice reviewed and what is the cost?

   All plans should be reviewed. Costs of any changes should be known in advance.

8. If I have any issues with the strategy, how will they be resolved?

   What if you do not want to accept the advice and terminate the planner’s services?

9. Who authorises you to give advice and are you licensed by ASIC?

   Business ownership can influence services and investments on offer. Some firms are owned by major banks /insurance companies/fund managers etc. Such ownership should be outlined in the FSG. To give advice a firm must be licensed by ASIC.

10. How does the planner keep up to date with changes?

    What regular updates are provided to the adviser and what courses are undertaken?