When selecting a financial adviser, you need to make sure you feel comfortable dealing with them. You should also ensure they have the qualifications necessary to provide you with financial advice.
Seven questions to ask your financial adviser:
1. Could I have a copy of your Disclosure Statement?
Disclosure Statements are documents that all financial advisers must provide before they provide you with investment advice about the financial adviser. They detail information about the adviser, including how they are paid.
2. What is your approach to financial planning?
Find out what kind of clients the financial adviser usually deals with. For example, some afinancial dvisers may concentrate on risk protection whilst others may deal with both risk protection and wealth creation.
3. How much do you usually charge?
Get an estimate of possible costs. Some finanicial advisers charge an hourly rate or flat fee, while others may receive payment through commissions on the products they provide. This should also be explained in their Disclosure Statement.
4. What do I need to know about risk?
Any investment involves some risk. Usually, the higher the potential for returns, the higher the level of risk. Your financial adviser should identify the level of risk you are prepared to take before recommending any investments.
5. Can I have a written recommendation?
You should ask for a written plan or recommendation from your financial adviser before agreeing to any strategy. It should include the reasons behind their recommendation.
6. Will my financial plan change as my circumstances and needs change?
As your circumstances and goals change, your financial plan should also change. Your financial adviser should help you regularly review your plan to ensure that you remain on track to achieve your goals.
7. How do you resolve any issues or disputes that may arise?
You should establish what happens if you don't accept your financial adviser's advice and find out at what stage you can terminate their services.
