Having a good financial adviser can make a huge difference to your current situation and your plans for the future. But how do you find the adviser that’s right for you?  

In many ways, you’re looking for a ‘perfect match.’ Someone who listens. Someone who gets you and knows what makes you tick. Someone who puts you first.

In a recent interview with Lynda McKie from Elston Private Wealth we looked at what people should be thinking about when choosing an adviser. 

QUESTION 1 – When do you know you’ve got a good adviser?

There are lots of factors to consider, but I’d say the quality of the relationship is key. It can start with compatibility and personality – a sort of sense that you’ve found a like-minded person. And if the adviser is a good communicator, is proactive and focused on what you need, the relationship gets stronger over time. I’ve had clients for five, ten, fifteen years. I think that’s because we understand each other and there’s a mutual trust there that enables us to have difficult conversations and be honest about what should be done.  

QUESTION 2 – What are three questions every adviser needs to answer?

It’s easy to assume that all advisers are created equal, but they’re not. The tricky part for most people is sorting out who’s good at what they do, and who’s just a nice person. I think it’s handy to go into the conversation with some questions ready to go. These three are a good place to start.

1. What are your qualifications? You want to know that they’re FASEA qualified. Also, are they a Certified Financial Planner? If they are, they’ll have CFP after their name. Check the adviser register if you’re not sure.
2. How passionate are you about financial planning? Passionate advisers will work hard to meet the new education requirements. Other advisers will walk away in the next four years. Where could that leave you?
3. Are you part of a team? An advice firm of just one or two people may struggle to deliver good service over the long term. There are just too many compliance requirements taking up their time. They may also lack the support of specialist investment managers. This is a real danger since Advisers who try to wear too many hats will often fall short across the board. The days of the ‘generalist’ are over. Find out about their business and ask who the licensee is. This could highlight any potential conflicts in advice you might receive.

QUESTION 3 – Do all advisers offer the same solutions?

No, they don’t. The ways that advisers set up financial strategies can look similar. But how those are actioned can vary quite a lot. At Elston we believe in active investment management when it comes to buying equities on the ASX. We are also managed account specialists. Managed accounts provide a number of benefits. You get to own the assets in your portfolio, and that helps to deliver some real tax benefits. This is something that we’ve been doing for clients of Elston for many years.

QUESTION 4 – Do good advisers talk about risk or return?

Be wary of an adviser who only talks about returns. It means they’re trying to sell you something. Advising is not about selling. It’s about honesty.

Ultimately, every investment discussion should include risk and return. How much risk are you taking on to achieve a return? How is risk being managed? What processes are in place to help prevent the permanent loss of capital?

QUESTION 5 – Do advisers put their clients’ interest first?

Advisers have a duty of care to act in their clients’ best interests. But of course, the way an advice firm or stockbroking company structures their fees or earns income from products can vary. I think it’s important to get full disclosure from your adviser and read the details carefully.

Choosing the right adviser for you takes time, thought, and honest conversations. So if you have any questions, pick up the phone and give me a buzz on 1300 ELSTON or fill in the form to the right and someone will be in touch.

Lynda McKie CFP
Elston Private Wealth