The eight golden rules of choosing a financial planner

September 7, 2004

The eight golden rules of choosing a financial planner

Like any profession, financial planning has unscrupulous operators who potential investors should avoid when shopping around for financial advice.

Melissa Caddick* from Wise Financial Services said the while most financial planners in Australia try to give the most well researched and up to date financial advice to their clients, it is always best to keep a few things in mind when seeking a professional out.

?As we have recently seen in the property market and with such things as pyramid schemes, unfortunately, some people pass themselves off as financial advisors, when in fact, they are no such thing,? Melissa said.

?We recommend people follow eight ?golden rules? when seeking the advice of a financial professional, and as always, we recommend seeking the advice of a qualified financial planner when making investment decisions, no matter how great a deal might look!? she said.

Wise?s Eight Golden Rules for Choosing a Financial Planner:
1. Is the financial advisor and the organisation accredited? Generally, a financial advisor and their organisation has to be recognised by a governing body as being appropriately governed and ethical.
2. Is the advisor compliant with recent government legislation? Government rules and regulations surrounding the financial services industry have recently undergone hefty reforms and financial advisors not only have to be aware of the changes, but implement them by a certain timeframe.
3. Is your financial advisor qualified? Ask for some qualifications or some proof of a proven record. Just because you have done a weekend course, it does not mean you are a ?financial advisor?.
4. Does your financial advisor listen? Many so-called advisors are not interested in your particular situation and offer the same solutions no matter what the problem. Be sure your advisor listens and then provides a unique program for your situation.
5. Does your advisor have experience with your particular problem? There is no point visiting an advisor who specialised in superannuation when your problem is debt. Much like question 3, ask for some proof before proceeding.
6. Do you have a rapport with your advisor? In other words, do you feel your advisor understands and want to help you with your financial situation?
7. Ask for references. There is no harm in asking your financial advisor for case studies or testimonials from anonymous clients.
8. How does your advisor charge? Will you be charged based on results or a flat fee? Be sure to understand what kind of fees you will be paying and when you have to pay them.

?If you try and stick to these rough guidelines, chances are you will get professional advice from an experienced financial planner,? Melissa said.

?This way, if your advice does not meet your standards or you are otherwise unhappy, you have legal recourse to do something about it,? she said.

Melissa Caddick is a Principal of Wise Financial Services. www.wise.com.au

* Wise Financial Services Pty Limited is a Corporate Authorised Representative and Melissa Caddick is an Authorised Representative of Tandem Financial Advice Limited (ABN 27 006 226 777) AFSL Number 238427.

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