How to start your journey with a financial adviser?

If you are the ‘CEO’ of your household, then consulting a financial adviser is like working with your CFO—as people tend to work with their financial advisers for many years. A few people have asked me about the financial planning process; hence, I would like to introduce the advice process and how to find the right financial adviser for your future.

Advice process

Discovery meeting: The first meeting between a financial adviser and a prospective client is the starting point for your financial planning journey. It involves that crucial moment in which both adviser and client gauge whether they are the right fit for each other. We take our time to understand our client’s needs and goals. In most cases, the first meeting is complimentary and we will explain how we charge for our services. In general, you should not expect to make immediate decisions when you first meet with a financial adviser. You have some learning to do first. If you walk out of an interview satisfied that the required bases have been or could be covered, then you will feel like you are partnering with a trustworthy professional. You know that you need someone to help you, so you need to feel that you have found the right one.

Client commitment meeting: After the discovery meeting, we develop appropriate recommendations and explain our strategies that will help our client achieve their goals and aspirations. Agreement is formalised at this second meeting, and we will then start working on your plan – your Statement of Advice (SOA).

Strategy meeting: Client can expect this third meeting to be more tactical. We will recommend detailed strategies and products in the form of an advice document – the SOA. If the client decides to accept the adviser’s recommendations, we will help you to implement the plan, which may take up to a few months.

Initial progress meeting: This meeting helps the client understand where we are up to in implementing their plan and we answer any questions and concerns you may have.

Regular progress meetings: Depending on the life stage you are in and the complexity of your financial plan, you may decide to have regular progress meetings annually, half-yearly or more often. If you have agreed to receive ongoing advice, then you must understand what your ongoing advice fee covers. Services may include:

  • regular reviews with us
  • regular reports on your investment portfolio
  • phone or email access to an adviser or an associate
  • newsletters and seminar invitations.

How your adviser charges fees depends on your needs and the adviser’s business model. In our business, we charge two types of fees – Plan Fee (one-off) & Ongoing Service Fee (annually).

 What do you need from a prospective financial adviser?

Here are some criteria that you can use to help you choose your financial adviser:

A licence to provide financial advice—You should always look for a financial adviser who works for a firm holding an AFS licence issued by ASIC. You can verify that the financial adviser is licenced by checking ASIC’s MoneySmart website.

Education and experience—Not all financial advisers have the same level of training or offer you the same depth of services. As such, in your search for an adviser, do your own due diligence and ensure that your financial adviser is properly qualified and trained to meet your financial planning needs. Someone who holds a degree in financial planning or who is a certified financial planner (CFP) is highly recommended. Your adviser needs extensive knowledge and experience if he or she gives advice in complex areas such as SMSF and aged care.

The kinds of questions your financial adviser asks—Did the adviser ask more about your money or about your life, values and goals? Those who only inquire about your money are only interested in your assets. If they do not have a clear understanding of where you have been, who you are and where you want to go, they cannot do the right thing for you.

The adviser’s listening skills—Good advisers ask the right questions and do more listening than talking, as it gives them an insight into their client’s needs. If you feel that you are not communicating with a good listener, and that the adviser dominates the conversation, then you should move on. You should not expect someone who does not understand your problems to solve them.

Language—An important competency that advisers should have is the ability to make complicated matters seem understandable and straightforward. Most clients are not financial experts, nor do they aim to be one. In the simplest terms, clients want to know what time it is, not how to build a clock. Great advisers don’t force their feelings and opinions on clients and they try to encourage their clients to take action for their own reasons, even when they feel what their client wishes to do is opposed to what the adviser might perceive the client should be doing.

Investment philosophy—One size doesn’t fit all. Clients’ investment strategies should fit with their needs. A financial adviser is the one who can help you stay on track with your long-term goals, regardless of any short-term distractions. If the financial adviser does not have a clear investment philosophy to guide you through the journey, then he or she is likely someone who just wants to follow the crowd. Advisers who only sell what they are told to sell are not the advisers for you.

Personal finance book | Your Best Life

Written more like a novel than a self-help guide, Your Best Life is designed to walk you through the journey of financial planning.