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Choosing a financial planner

Choosing a financial planner

A financial planner can help you make the most of your money and decide where to invest it. But how do you pick a good planner and avoid being ripped off?

We’ve sourced some useful info from the Australian Securities and Investments Commission (ASIC) to help you in your search for the right financial planner.

Do I need a financial planner?
At the end of the day, it’s entirely up you! If you have money to invest or you’re looking to create wealth it might be worth speaking to a financial planner.

A planner takes into account your personal financial situation and your financial objectives to help you decide how to structure your investment eg. how much to invest in shares or property, cash or fixed interest etc. They’ll also be able to tell you how much insurance you need to make sure you’re covered, and what the tax implications will be.

Where do I go to find a good financial planner?
Talking to people you know at work or friends and family is a good way to find a planner. Ask your bank manager or contact your superannuation fund. Alternatively you can contact the Financial Planning Association (FPA) to find reputable, certified financial planners.

How do I make sure the planner is legit?
- Make sure they are licensed with ASIC.
- Don’t be afraid to ask questions. Find out how they are paid. Many are paid on a commission basis.
- Look at what services they offer and question them to find out their specialty. That may be handy if for example you are a public servant as public service super schemes are different from the private sector.
How much will a financial planner cost me?
There’s no prescribed amounts that planners can charge. Most reputable financial planners offer the initial consultation for free, so you have a chance to see if you like the planner and trust their expertise.

Planners can then charge an hourly rate, a fixed amount, a commission on the products they sell (the industry standard is between 1.5 per cent and 3 per cent). It may cost between $1,000 - $2,000 to begin with. However, these fees should be negotiable.

What paperwork should I get?
At your first consultation you should get a Financial Services Guide (FSG), which sets out who the advisor is, what services they offer, and what you can do if there’s a problem later on.

Once you commit to go ahead, you’ll get a Statement Of Advice (SOA) - advice specific to your situation and the planner’s reasons for believing the advice is suitable.

How do you avoid getting ripped off?
- Only ever use a licensed financial planner.
- Read all the info they give you, don’t be shy and ask plenty of questions. If the language is confusing it could be because it’s a scam.
- Always be careful of high returns, ’sure bets’ or secret deals.
- Ask your planner up front what happens if things go wrong later on. If they are unwilling or unable to outline their dispute resolution process, this could also be an indication that something is not right.

by Ryan Waston

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