When you’re choosing a financial adviser to work with, it’s important you find the right fit for you and your circumstances. Engaging with and working closely with a quality financial adviser, can be one of the most important professional relationships you develop. Therefore, approach the initial meeting prepared to have an open conversation. You should be interviewing them as much as they are interviewing you.
An amazing client/adviser relationship should be win/win. It will be a relationship of mutual respect. It should be challenging (in all the best ways)…and preferably, be fun!
One of the best ways to find a great financial adviser to work with is via a trusted source. Ask around friends, family and colleagues for a recommendation – provided they’ve had a great experience.
- Who do they use and why?
- What advice have they been provided?
- Have they got tangible benefits from the advice relationship?
Then make a time to meet with this adviser and go to the meeting with an open mind.
Below is a list of “The Top 10 Questions” (in no particular order) to ask the adviser throughout the course of the meeting. Regardless of the experience that friends, family and colleagues have had, you need to find the right fit for you. Because it’s your financial future. And engaging a great adviser (and the right one for you) is one of the most important decisions you’ll make on your path towards Financial Freedom.
Interview a few, and find arguably your greatest ally on your wealth building journey.
Top questions to ask a financial adviser before choosing to engage them;
1) What is the typical type of client the adviser works with?
Ideally clients like you, who’ve had similar challenges & goals to you. There’s not much point working with an adviser who doesn’t specialise in and understand clients like you. You are likely to get better advice and have a much more worthwhile experience when you work with an adviser whose core client base are full of clients similar to you and your stage of life.
2) What benefits has the typical type of client gained from working with the adviser?
Ask for specific detail, and tangible client examples. Ideally the benefits and results that other clients have achieved would be similar to what you are aspiring to for yourself.
3) What qualifications does the adviser have and how long have they been an adviser for?
The adviser you engage should have a bit of life experience and has been in the industry for at least several years and helped hundreds of clients previously. Additionally they should be well qualified (with at least a relevant business degree and ideally CFP qualified) and also committed to ongoing learning & professional development.
4) Why did they want to get into financial planning in the first place and did they have any other careers before this?
Do they answer passionately? Are they committed to their profession, and do they live and breathe what they do? Don’t work with an adviser who is just doing it for a “job”. Work with an adviser who absolutely loves what they do, believes wholeheartedly in the value of what they do and is willing to give you advice with conviction.
5) Does their advice business have its own Australian Financial Services Licence (AFSL)?
You want to work with an advice firm that has no alliances to any institutions and is completely objective. Having their own AFSL means they are licensed directly through ASIC (the regulator) and usually means that they will provide objective and unbiased advice (unfortunately this is not always the case though).
6) How do they and their business get paid?
Ideally fee for service for initial strategy advice, implementation and ongoing service (with everything being discussed and agreed upon up front, with no surprises). “Fee for service” means the adviser/advice firm charges a specific fee for each stage of the advice and gets paid by you as the client – via an agreed fixed fee – and not as a % fee via providers like super funds or investment companies. (The only exception that is ok is with wealth protection insurance advice where brokerage is typically paid from the insurance companies – in lieu of a direct fee for service – like how banks pay mortgage brokers. I’m yet to meet any clients that are happy to pay for all the work that goes into providing, implementing and regularly reviewing risk insurance – not to mention managing the whole process in the event of a client needing to claim).
7) Specifically, what services do they and also their firm offer?
Most people who seek advice are looking for holistic advice, not just one service i.e. investment advice. If you are looking for overall wealth strategy advice, make sure you engage an adviser/advice firm that provides this. Otherwise if you engage single service firms i.e. investment, insurance, tax, mortgage broking, financial strategy, you could end up needing to engage 3-4 different firms to get what you want. Then you need to constantly coordinate communication between all firms to get some degree of overall advice. It’s best to work with a firm who has all these services under one roof. While the financial adviser wouldn’t necessarily be the person providing advice in all areas, they would be your main adviser and relationship manager, and coordinate other specialists as required.
8) Who will be providing you with the advice and who in the firm will you be working with ongoing?
As above, the financial adviser should be your main adviser and also consistent. It’s a relationship that develops and grows over time. It’s good to find out upfront whether the adviser plans to introduce other advisers as the ongoing review advisers. If so ask to meet these other advisers and test them out in the initial meeting. There is no point engaging a firm because of the adviser, if you are never going to see them again.
9) Can they provide you with a handful of testimonials from clients they’ve been working with for a while?
What better way to find out if an adviser is any good than via a list – ideally 10 or more, not just 1 or 2 – of testimonials and feedback from other long standing clients?
10) How does the adviser manage/invest their own money and what position are they in themselves?
This could be interesting! Whilst this may be uncomfortable to ask. It’s seriously one of the best questions you can ask a potential adviser. The advisers you want to work with will answer this with conviction, and it will be abundantly clear whether they follow their own advice. In fairness to younger or newer advisers, they may not be able to answer this with the same level of conviction, but ideally you are looking for them to answer authentically. And at a minimum be following their own advice, building good financial habits, learning from more experienced advisers around them, and one way or another be able to add value to your life.
Whilst interviewing the adviser is important, the clearer you are on what you want to achieve from an advice relationship the easier it will be to find a suitable adviser and the better the experience you will have. Also, the more clarity you have on your goals along with your current position, the more value you will get from any initial financial strategy discussions. Refer back to the sections on Clarify Your Vision and Evaluate Your Position, for more guidance on this.
Matthew Morrison is the Director of Wealth Advisory at The Practice, a Personal Wealth Advisory & Business Advisory firm based in Melbourne & Sydney. Matt along with The Practice team are committed to and passionate about developing & implementing wealth creation strategies for clients to enable them to Fuel their Family’s Future (while protecting them along the journey).
Matt and The Practice team can be contacted via https://thepractice.com.au or (03) 8888 4000.
Disclaimer – the above views and ideas are general advice only and are purely the opinions of the author. It’s important that you seek professional advice tailored to your needs before taking action regarding your financial future. (Also, unfortunately we can’t guarantee the top quality content in this blog will secure you a prosperous future if you ‘try this at home’, or trust any old backyard financial adviser to help you & your family with what is one of the most important decisions you’ll ever make…who to partner with on your quest to build wealth & create future Financial Freedom).