How to choose a financial adviser

Jan is finding retirement confusing but is worried about dodgy financial advisers.

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Q. Jan
I must say I find all this retirement thing confusing to say the least! My partner and I would like to sit down with an adviser and discuss our options. Should we see a Centrelink adviser first or an independent adviser? How do we choose a reliable financial adviser?

A. Jan, working out where you stand financially is the critical first step in planning your retirement.

At any time, you can make an appointment to speak to a Centrelink Financial Information Services Officer (FISO) who will be able to discuss with you whether your assets and income will affect payment of the Age Pension, how to claim and which concession cards may be available. You can make an appointment by calling 13 2300.

However, engaging a good financial adviser can also prove useful in helping you set financial goals for your retirement and creating a plan to achieve them.

The Financial Planning Association of Australia offers a ‘Find a Planner’ tool that will list advisers in your area and the Association of Financial Advisers offers a similar service.

When you have created a short list of advisers you can check their history, qualifications and current employment status on Moneysmart’s financial advisers register before you approach them about getting advice.

The register tells you:

  • the adviser’s qualifications, experience and employment history
  • the types of products the adviser can provide advice on
  • if the adviser is a member of a relevant professional body or industry association
  • whether the adviser has been the subject of disciplinary action by ASIC
  • the name and number of the Australian Financial Services (AFS) licence holder who employs or authorises the financial adviser to provide advice
  • details about who owns or controls the licence holder.

If the adviser is not operating under a licence, do not deal with them – they are breaking the law and you will have little protection if things go wrong.

Find out what they offer
Read the financial services guide (FSG) of any financial advisers you are seriously considering. You can find the guide on their website or ask them for a copy.

The guide will tell you:

  • what services the adviser offers
  • how they charge and whether they receive any additional payments or benefits
  • who owns the company that employs the adviser
  • if they have links to a product provider, such as a bank, fund manager or life insurance company, that may affect the products and services they offer
  • their AFS licence number.

Ask the adviser about their typical clients, to see if they have experience dealing with people who have similar issues and goals to you. For example, are the adviser’s other clients planning for retirement?

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Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

Written by Ben

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