Choose a financial adviser
is important to choose your financial adviser carefully.
The person you
choose is going to learn a lot about your personal affairs, and
must be someone in whom you trust. A good, trustworthy, reputable
financial adviser will not mind your enquiries into his or her
and reputation. An investment adviser must give you a written
statement that contains information about the adviser and his or her
ability to give advice. You are strongly encouraged to read that
document and consider the information in it when deciding whether or
not to engage an adviser.
Tell the adviser what the purpose of your investment is. This is
important because different investments are suitable for different purposes,
and carry different levels of risk.
The written statement should contain important information about the
- relevant experience and qualifications, and whether dispute
resolution services are available to you; and
- what types of investments the adviser gives advice about; and
- whether the advice is limited to investments offered by 1 or more
particular financial institutions; and
- information that may be relevant to the adviserís character,
including certain criminal convictions, bankruptcy, any adverse findings
by a court against the adviser in a professional capacity, and whether
the adviser has been expelled from, or prohibited from joining, a
professional body; and
- any relationships likely to give rise to a conflict of interest.
The adviser must also tell you about fees and remuneration before giving
you advice about an investment. The information about fees and remuneration
- the nature and level of the fees you will be charged for receiving
the advice; and
- whether the adviser will or may receive a commission or other
benefit from advising you.
An investment adviser commits an offence if he or she does not provide
you with the information required.
questions to ask a potential financial adviser:
- Are you
self-employed or do you work for a firm?
- What is your
role within the firm and who owns it?
- What are
your qualifications that will enable you to provide me with good
service and advice?
- What practical
and professional experience have you had in giving investment
- How do you
select the investments you recommend and how do you determine
what is suitable for me?
- What is
your source of research?
- Do you provide
a written financial report and what information is contained in
that report? Look for a personalised financial plan that is based
on your individual circumstances and meets your own specific needs
- What types
of services am I entitled to receive if I become a client of your
firm? Such services may include regular reviews on the performance
of your portfolio, client newsletters and seminars. In addition,
planners may offer insurance, tax and share broking services.
- Can you provide
the names of some existing clients who would be prepared to
endorse your company and its services?
Client confidentiality must be preserved. However a number of
companies have letters from satisfied customers who have been
pleased with the service they have received and have written to
offer their thanks.
- What fees
do you charge for:
A financial plan?
Annual or regular reviews?
Purchasing or amending a portfolio?
It is a good
idea to ask for an example of the fee structure including
the commission paid to the adviser.
After you have chosen a financial adviser you should expect
to pay for their expertise and service just as you would any
other professional. Remember that free advice may be worth
only as much as it costs.
Fees can be
charged in various ways:
- the adviser
accepts the commission from the investment as their fee
- the adviser
rebates the commission and accepts a fee as their payment
- a combination
managers pay commission to advisers. BT discloses these
payments in the relevant offer document.
You may be interested in our Adviser
Referral service where we recommend a financial adviser
in your area.