Investment advice: what to look out for
Why get investment advice? Because you’d be mad not to! Are you a financial planner/adviser? Did you grow up in a household of financial advisers? If not, then it’s probably worth seeking some advice. A financial adviser can help you with just one aspect or the entirety of your financial life (such as insurance, real estate advice, superannuation, tax etc.)
Investment advice should essentially help you to be smart with your money. It can help you get the most out of your money by making sure you understand the systems to use when making any financial commitment. This can include utilising government assistance, tax concessions and healthy budgeting practices. You may be able to have a child without needing to read a load of advice, that does not apply to investing. Seek help and empower yourself to make the right decisions for your investments.
Where to get investment advice
ASIC’s financial advisers register is your number one tool. It can help you ensure that your financial adviser is who they say they are. It is a government register of financial advisers that can tell you what a financial adviser can help you with, whether they have had any actions taken against them and what their qualifications are.
You can also get the investment advice of a property investment adviser, but be aware that this industry is less regulated than the financial planning industry. Be extra astute in evaluating a property investment adviser. You want to make sure you aren’t simply being sold a property. Instead, you want to be given professional advice on managing your finances. A property investment adviser can be an effective tool in managing your property portfolio. Aim to establish a long-term relationship with them where you can have a mutually beneficial arrangement where their ongoing support results in savings for your investments.
What to look out for
Read their FSG.
A financial adviser should be able to provide you with their specific financial services guide (FSG), which outlines what their business offers you. For instance, they may only focus on a limited number of financial areas, such as superannuation, which may not apply to you if you are investing in a property and wish to make sure you are making the most of any tax concessions that come from your investment.
The university of life?
Beyond just looking at someone’s qualifications (which you can see on their ASICS registry listing), look at how long they have been in their role and both the length of time it took them to complete their qualifications (if you can find this out) and then what experience they can detail since gaining their qualifications. It may seem a bit hard to ask these things of someone, but a professional should be comfortable in telling you of their professional experience, with the aim of assuring you of their suitability. If you ask these things nicely then they should not be cagey in their reaction.
Ask what sort of professional development they have done in the past, and what they continue to do. This will give you an idea of whether this individual looks at new ways to manage their relationships and manage the finances of these relationships. If their answer is vague, cannot point to instances of PD, or suggest that it is not relevant or prevalent in their industry, then you have reason to look elsewhere.
How are you different?
How will they approach your relationship? In other words, what are the first steps? How do they approach clients and of course, what are the costs?
Money, money, money.
Ask for an estimate of their fees. Will it will be an ongoing cost? Will you receive ongoing reports on your financial portfolio? If so, make sure that you can easily contact your financial adviser. If they aren’t easily contactable then you should look elsewhere.
For a thorough look at investing in property, see our Ultimate Guide to Investing.