Working with a financial adviser

Keep an eye on your financial plan

Your relationship with a financial adviser can be an ongoing commitment or a one-off encounter. Whichever relationship you choose, it's important to stay actively engaged with the financial advice to see whether it's working for you.

Reviewing your financial plan

Review your Statement of Advice (SOA) at least once a year to ensure it's still right for you. Consider whether there have been any changes in your life that might affect your current strategy or attitude to risk.

See goals and risk tolerance for more information about assessing your investment goals.

Contact your adviser if you think you need to change something in your plan. If you've agreed to ongoing advice, this service should be included in your ongoing advice fee.

If you don't have an ongoing advice agreement, you will have to pay for the adviser's time and for them to implement any new advice. See financial advice costs to learn more about paying for financial advice.

Making the most of ongoing financial advice

To make the most of ongoing advice it's important to regularly review your financial plan with your adviser to see if it's still appropriate for you. If you have given your adviser an authority over a deposit account, such as a cash management account, you will need to review your investments a lot more frequently. See setting up a cash management account, below.

What you should do 

Don't adopt a 'set and forget' attitude. At a minimum, you should visit your adviser once a year for a review of your current SOA.

Between reviews, it's important that you keep your adviser updated about any changes in your circumstances so they can adjust your plan to keep it relevant to you.

Also use the yearly review as an opportunity to think about whether you're getting value for your ongoing advice fee. See ongoing fees for financial advice for more information.

What your adviser should do 

Between reviews, your adviser should keep you updated about any changes to the economy, legislation or markets that impact the advice and products they've recommended for you.

If there are any changes to your current plan, your adviser should give you a record of their new advice either at the end of the meeting, or shortly after.

Check you are getting the ongoing advice you pay for

ASIC has found some advisers charging for ongoing advice that they have not provided. If you are paying ongoing advice fees, make sure you are getting 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 compensation. See ASIC's media release for more information.

If you are paying ongoing advice fees for services you don't need, you can ask for the fees to be switched off.

Setting up a cash management account

Cash management accounts are typically used to hold surplus funds and allow your investments to be actively managed. If your adviser has recommended that you open a cash management account or any kind of deposit account, or helped you open this type of account, they may also have asked you for an authority to view and/or make transactions on your behalf.

If you have given your adviser an authority on your cash account (also known as a 'third party authority'), make sure you understand exactly what type of authority they have and the risks associated with it.

Types of adviser third party authorities

The authority your adviser has over a deposit or cash management account can be classified by the amount of access you give them:

  • View access - your adviser can see the account transactions but cannot operate the account.
  • Withdrawal access - your adviser can make transactions, including withdrawals, on the account.
  • Complete access - your adviser can do all the things that you can do with the account, including changing contact details, changing or adding authorised signatories or closing the account.

The risks of giving your adviser third party authority

By giving your adviser access to your account (which may be referred to as an 'adviser-operated account') you are placing a lot of trust in them. You risk having your money invested in products or schemes that may not be in your best interests, and it is easier for your adviser to commit fraud. While the risk of fraud may be remote, it could have serious consequences if it does occur.

See ASIC's media release on action we have taken against a former stockbroker for dishonestly using clients' funds.

Ask your adviser why they have suggested a particular level of authority, what it will allow them to do, and what other options are available. Don't give your adviser a level of access that you are not comfortable with.

You can limit your risks by:

  • Understanding the extent of the authority you have given your adviser and the risks involved
  • Getting all account details, including any authorities you have provided, in writing
  • Checking whether you will be notified each time your adviser makes a transaction on your account
  • Making sure all correspondence relating to the account comes to you, even if your adviser also receives the information
  • Checking the account transactions regularly and talking to your bank if something doesn't look right.

Saying no to ongoing advice

Your financial affairs might be quite simple. If you have enough time and know-how, you may not need to pay an adviser for ongoing service.

It's up to you whether you want or need ongoing service from your adviser. You still have the option of getting advice in the future if your circumstances change.

See 'ending your relationship with an adviser' below for things you should think about before you go it alone.

Ending your relationship with an adviser

If you decide you no longer want ongoing financial advice, there are some things you should consider.

Some financial products, master trusts for example, can only be accessed through a financial adviser, so if you decide to end your relationship with them you may also have to leave the products they recommended, or get a new adviser.

If you leave or switch advisers you will have to consider:

  • Selling and buying costs
  • Changes to any government assistance you're receiving
  • Being out of the market (which could be an advantage or disadvantage depending on timing)
  • Income and capital gains tax

If you decide to switch advisers or leave an investment product, you need to be satisfied that it is worth the cost of doing so.

Sometimes all you'll need from an adviser is initial advice. At other times it can be useful to have access to their expertise on an ongoing basis. The important thing is that you decide how much involvement you want an adviser to have and know how much you are paying for it.

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Last updated: 06 Mar 2018