Questions to ask a financial adviser
Financial adviser shopping list
Choosing your adviser is an important decision. Do some research
and talk with a few advisers before you decide which one to work
Here are some questions to ask.
qualifications and experience
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. You can check the adviser's
qualifications on ASIC's financial advisers
Q: What is your representative number and who holds your
Tip: Keep a record of the name and number the
adviser gives you so you can check it on ASIC's financial advisers
Q: Are you authorised to provide advice on the products
you are recommending to me?
Tip: Use ASIC's financial advisers register
to check the kinds of products the adviser can recommend.
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?
Q: What is your experience as a financial
Tip: Make sure the adviser tells you about
their typical clients. This will help you judge whether they have
the experience to deal with people with similar issues and goals as
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? Details about an adviser's experience is also
available on ASIC's financial advisers
Q: Are you a member of any industry associations and /
or professional bodies?
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(s) 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.
See choosing a financial
adviser for more information on qualifications and
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
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 are my investments 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 to see 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.
Q: How are you paid? How much is your
advice likely to cost? Can you give me a breakdown of the
Tip: The adviser should outline what will be
included in the fees you pay and whether there will be any
additional costs for preparing a statement
of advice (SOA), implementing the advice, or revisiting the
advice in future years if your circumstances change.
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: 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 about?
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 for selling 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.
See financial advice costs for more
information about paying for advice.
Financial products and
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
Q: What fees or other benefits do you receive for
referring me to another person or business?
Tip: Be aware that an adviser may benefit from
a pre-existing relationship they have with the other professionals
or businesses they recommend.
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.
See financial products
and sales incentives for more information about benefits
financial advisers might receive.
What to look for in financial
Q: What are the risks of this investment in the short or
Tip: The adviser, and the product disclosure
statement for each product they recommend, should clearly explain
the risks of the investment.
Q: How will any financial losses be covered if the
investment doesn't generate the expected returns?
Tip: All investments carry some risk. The SOA
you receive should clearly set out the pros and cons of acting on
the advice and how the product aligns with your risk profile. Ask
your adviser to explain anything you don't understand.
and return for more information about investment risk.
Q: How is this investment consistent with my
Tip: The adviser and the SOA you receive should
clearly explain how the features of the product(s) will help you
achieve your goals. Don't be afraid to ask for an explanation as
many times as you need to until you understand and feel comfortable
with the risks.
Q: If I change into the investment you recommend, what
will I lose?
Tip: If the advice is to switch products, has
the adviser clearly explained what benefits you might lose as a
result? For example, consolidating super might save fees but your
level of insurance cover might decrease. Make sure you understand
the pros and cons of any advice you receive.
See what to look for in
financial advice for more information about what you should
consider before you act on an adviser's recommendations.
Ask our questions of several financial advisers.
Then use our tips to compare how they rate in experience,
professionalism, cost and willingness to put your interests first.
Then you'll be able to choose the right adviser for you.
Last updated: 10 Sep 2015