Investing in a financial advisor can be a critical step in making informed financial decisions and planning for the future. But how do you find the right–properly certified–financial advisor for you, and what should you consider when comparing your options?
When searching for a suitable, certified financial advisor, there are key considerations to keep in mind. A financial advisor’s role is to assist in planning for financial goals, which can encompass advice on budgeting, investments in stocks, cryptocurrencies, or property, superannuation, retirement planning, tax matters, or insurance requirements.
Financial advice is categorized into two types: general and personal. General financial advice doesn’t consider your personal situation or goals and is more about outlining options. In contrast, personal financial advice is tailored to your circumstances and goals, with the advisor required to act in your best interests. Personal advice can range from simple to comprehensive, or be ongoing, depending on your needs.
When selecting a financial advisor, consider what you aim to achieve from the advice, based on your life stage and financial goals. Review their Financial Services Guide for details on their services, fees, company ownership, links to product providers, and their licensing. Be aware of the fees involved, which can be fixed, percentage-based, or commission-based.
Prepare questions for potential advisors to ensure they meet your needs, such as their client base, frequency of meetings, investment monitoring, commissions, and the process of terminating the agreement. To safeguard your finances, remain cautious about the access given to advisors and insist on receiving all investment correspondence.
Be vigilant about financial advice scams, especially in the digital age. Scammers posing as financial advisors may promise high returns or require direct access to your financial institutions. Always ensure that any financial advisor is regulated and holds a valid licence to avoid such scams.