Choosing a financial adviser
Finding an adviser that suits you
A good financial adviser will help you set your financial goals
and create a plan to achieve them. Here are some tips on how to
find the right financial adviser for you, and some questions to
Finding an adviser to suit
Once you have identified your financial advice needs, you can look
for an adviser who offers the services you are looking for.
One way to find an adviser is to conduct an internet search for
information about an adviser or the business they work for.
Alternatively, you could use a 'find an adviser' service through
an industry association, which can help you find an adviser in your
area. Most associations require members to participate in ongoing
training, follow a code of conduct, and have a mechanism for
To get you started, here are two examples of 'find an adviser'
Important: ASIC's role
ASIC is Australia's corporate, markets and financial
services regulator. They have developed MoneySmart to provide
general information and tools to help you manage your money and
make financial decisions. ASIC cannot give personal financial
advice or endorse or recommend a financial adviser.
Check the financial advisers register
When you have a short list of advisers, it's important to check
their history, qualifications and current employment status before
you approach them about getting advice.
The register tells you:
- the adviser's qualifications, experience and employment
- the types of products the adviser can provide advice on
- if the adviser is a member of a relevant professional body or
- whether the adviser has been the subject of disciplinary action
- 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.
Check your adviser is licensed to provide the type of advice you
Financial advisers register
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.
Get a financial services guide
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.
General questions for a
When choosing an adviser, you'll want to know if they have the
right qualifications and experience to help you achieve your
Advisers who hold an advanced diploma or degree qualification in
a relevant discipline, like finance, economics, accounting or
financial planning, are better qualified to give advice than
someone who has only met minimum training requirements.
From 1 January 2019, new advisers must have a relevant
bachelor's degree or higher, pass an exam, have completed a
professional year and meet ongoing continued professional
development (CPD) requirements. For more information, see ASIC's financial adviser
Q: What are your qualifications? How long did it take
you to get them?
Tip: The adviser should tell you about the
subjects they've studied and the length of any courses they've
done. A diploma, advanced diploma or degree qualification in
finance, economics, accounting or financial planning in desirable.
As a general guide, the longer a course of study the more
comprehensive the course content.
Q: Can you advise on my current products?
Tip: It's important for you to determine if the
adviser is restricted to only giving advice about products on their
approved product list. For example, can they give advice in
relation to your current super fund or managed fund?
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 or are they young families wanting to save for their
children's education? Ask how long they have been working as an
adviser, this may be important if you are looking for complex or
Ongoing professional development
Like other professionals, an adviser should keep up with
industry or regulatory changes that might affect their clients.
They should participate in regular training activities, to maintain
Q: How do you keep up to date with changes that might
affect your clients?
Tip: The adviser should tell you that they
regularly attend courses or seminars run by industry associations,
professional bodies, universities or registered training
Industry association membership
Check whether the adviser is a member of an industry association
and/or a professional body. Most associations require members to
participate in ongoing training, have a code of conduct for members
to follow and a mechanism for handling complaints.
Q: Are you a member of any industry associations or
Tip: ASIC's financial advisers register
will tell you which associations or professional bodies the adviser
belongs to. If the adviser is a member, ask them what their
association expects them to do to remain a member. You can also
check the industry association or professional body's website for
information about the adviser.
Meeting client needs
Q: How do you get to know a new client?
Tip: The adviser should talk about how they'll
get a full picture of your circumstances and needs. They should
explain that they need to ask questions about your current
situation as well as your financial goals, both long term and short
Q: How do you deal with a client who has a few different
Tip: An adviser should help their clients
prioritise their financial goals, explain and discuss their choices
and develop a strategy to achieve their goals. They should also
help a client refine their goals if they are not realistic and
Q: If I accept this advice, who do I speak to if I have
any questions or concerns about my investments?
Tip: You should be able to contact your adviser
if you have any questions or concerns about your investments. If
the adviser won't meet with you or return your calls, you can
complain. See problems with a financial
adviser for more information.
Q: How will my investments be monitored, and what
information will I receive?
Tip: If you've agreed to ongoing advice, you
should receive regular reports about your investments as well as
regular reviews with the adviser. Check what other updates you'll
get, and when you can expect to receive them.
Don't be afraid to contact your adviser if you have any
questions between reviews. Be aware that the adviser might charge
you extra for services that are not part of the ongoing advice
agreement that you have entered into.
financial products and sales incentives
When recommending financial products, advisers usually have an
'approved product list (APL). An APL contains financial products
the advice business has researched and given their advisers
authority to provide advice about. Find out whether they can advise
you on your current products if they are not on their APL.
Make sure the adviser focuses on the services and
strategies they can offer you, not the products they can sell
Many APLs contain 'in-house' products, which are products
provided by a related party, such as the bank or other financial
institution the adviser is employed by. In-house products may
create a conflict of interest for the adviser. See ASIC's media release on how large
financial institutions manage these conflicts of interest.
If an adviser recommends you switch to an in-house product, ask
them to explain why your existing investment is no longer suitable
and how the recommended product is better. If you switch life
insurance policies, make sure you aren't losing existing benefits
you want to keep.
If you decide to switch to an in-house product, be aware that
the adviser may receive some sort of benefit, like a performance
bonus for selling you that product.
One stop shops
ASIC has seen a significant increase in advisers offering a 'one
stop shop', where you have access to a number of related
professional services in the one place. This may seem convenient;
but the adviser may receive a monetary benefit for recommending
other professionals or businesses.
For example, an adviser may recommend you set up a self-managed
super fund (SMSF) with a strategy to invest in property. They then
refer you to a property developer to help you find an investment
property, an accountant to help you with the set up and ongoing
management of the SMSF, and a lawyer to take care of the legal
requirements. In this situation, it's important to be aware that
the adviser may have a pre-existing business relationship with the
professionals they've recommended. They may receive a referral fee
or other benefits, or they could have a personal interest in the
Q: Do you only advise on in-house products? If so, how
do you make sure another product is not a better option for
Tip: If an adviser recommends you switch to an
in-house product, you should be satisfied that they've compared the
fees, charges and benefits of each product. The reasons for
choosing one product over another should be documented in your Statement of Advice (SOA).
Q: What fees or other benefits do you receive for
referring me to another person or business?
Tip: An adviser may benefit from a pre-existing
relationship they have with the other professionals or businesses
Q: Are you, or this financial advice business,
associated with the people or businesses you're referring me
Tip: Check ASIC's financial advisers register
to see the business names associated with the adviser or the
licensee they work for.
Questions about financial advice
Ask for an estimate of the cost of the advice. Even a rough
estimate will give you an idea of what you'll be paying.
Advisers may charge for their services on a fee-for-service
basis, a percentage-of-assets basis or a combination of both. Ask
for an estimate of fees for:
- preparing the advice
- implementing the advice
- ongoing monitoring and advice.
Q: How are you paid? How much is your advice likely to
cost? Can you give me a breakdown of the costs?
Tip: The adviser should outline what will be
included in the fees you pay and whether there will be any
additional costs for preparing an SOA, implementing the advice, or
revisiting the advice in future years if your circumstances
Q: If I agree to ongoing advice, what will I get for my
fees? Are the fees paid annually or monthly? Can I get the fee
Tip: Fees for ongoing advice usually include
regular reviews of your circumstances and investment portfolio, and
a re-balancing of your investment portfolio if necessary. You
should expect to have reasonable access to your adviser when you
need questions answered or want to discuss a financial issue with
Q: What do I do if I've been paying ongoing advice fees
but haven't received an ongoing service?
Tip: ASIC has found some advisers charging for
ongoing advice that they have not provided. If you are paying
ongoing advice fees, make sure you get the services you
paid for. If you have paid fees for services you haven't
received, lodge a complaint through the bank or licensee's internal
dispute resolution system as you may be entitled to a refund and
Q: How can I stop paying your ongoing advice fees if I
decide I no longer want advice from you? Are there any penalties or
notice periods I need to be aware of?
Tip: You can stop paying for ongoing advice at
Q: Are there any other fees or charges, such as service
or administration fees, that you haven't told me
Tip: Ask the adviser for information about the
total amount you're paying in fees, and who's receiving each fee.
Make sure the cost is given to you in dollars, not just a
percentage of the amount you have to invest.
Q: Do you get paid to sell me a product? Do you get any
other benefits such as gifts or bonuses?
Tip: An adviser may get 'soft dollar' benefits
such as gifts or freebies for selling you a product. Ask them to
explain what these are and their value. It's in your best interest
to know if there are any incentives for the adviser to sell you a
Q: If I dispute the fees, what process do you have in
place to address my concerns?
Tip: The adviser should explain how their
internal dispute resolution system works. The adviser's financial
services guide will also tell you how to lodge a complaint.
Financial advice from a
In addition to professional legal services, some lawyers may
offer financial or investment services. If a lawyer gives you
general or personal financial advice they must be licensed. Check
their details on ASIC's financial advisers
When you pay a lawyer for legal services, it is usually
protected by a fidelity fund. However, money you give them for
investing does not have the same protection, and you may not be
compensated if the money is lost through fraud, theft or error.
To protect your money, never give the lawyer cash or write
cheques payable to the lawyer or law firm if the money will be used
for investments. Make the cheque payable to the product provider
To make a complaint about the conduct of a lawyer or law firm,
contact the relevant legal services commission in your state.
If you're concerned that a lawyer or law firm might be providing
financial advice without a licence, you can report it to ASIC.
Don't be afraid to ask an adviser about their
qualification and experience. You need to be confident they have
the expertise to provide the service you are paying for. If they
don't have enough experience or knowledge in a particular area,
find another adviser.
Last updated: 03 Dec 2018