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Choosing the right financial adviser


Everyone has different financial goals at different stages in their lives; seeking expert guidance from a professional can be key in helping you achieve them.

A financial adviser or planner is a professional that specialises in developing personalised strategies to set their clients up for financial success. They can advise on investments or insurance products that meet your needs and objectives, and plan ahead for major life milestones including starting a family, investing in a property, or entering retirement.

But how do you find a financial adviser you can trust, and how do you know if they’re giving sound advice? Read on for tips about choosing the right financial adviser for you.

When should I talk to a financial adviser?

There are many reasons why you may want to seek advice from a financial adviser. These can include:

  • You’re starting a business
  • You’ve recently married or become a parent
  • You’ve unexpectedly come into money (for example, through an inheritance)
  • You’re making a large purchase
  • You need advice in planning for your financial future for any other reason
  • You feel like you know what you’re doing but would still like a professional opinion.

How do I find a financial adviser I can trust?

Before you choose a financial adviser, be sure to tick off these points below to help you find one you can trust:

- Do your research: Study up on the most important things to look for when choosing the right financial adviser and make sure you know what your highest priorities are.

- Use an official source for publically listed financial advisers: This will let you know whether the financial adviser is qualified to provide the advice you need.

- Check the Financial Advisers Register for banned and disqualified advisers: The 'Banned and disqualified' search provides information about people and organisations that ASIC has disqualified or banned.

- Make sure the financial adviser is a certified financial planner (CFP): This means they’re licensed and have passed a test administered by the Certified Financial Planner Board of Studies, etc. For more information, visit: https://www.cfp.net.

- Read the adviser’s financial services guide (FSG): You should be able to find this on their website. Otherwise ask them for a copy.

- Write down your goals: Get a clear picture about what you want and what your financial adviser can help with. Do you want to save? Invest? Buy a home?

- Ask around: Listen to recommendations from friends, family, and colleagues. Try to find a name that is recognised and respected in your local community.

What makes a good financial adviser?

A good financial planner can assist you with managing your assets, investments, and budgets. They can also review the types of insurance coverage you have, identify ways to achieve savings, and help ensure you’re in control of your finances.

By getting to know your spending habits, debts, and goals, a good financial planner will create a tailored strategy just for you.

How do I know if my financial adviser is bad or negligent?

Choosing a financial adviser is an important decision, and one that could have harmful consequences should the professional you have entrusted delivers a poor or negligent service.

The following warnings signs could mean you’ve got a problem with your financial adviser:

  1. They make you feel uncomfortable when you ask questions or raise concerns
  2. You feel pressured into signing documents you haven’t reviewed or don’t understand
  3. They provide advice that isn’t in line with your goals or risk level
  4. They push one solution instead of looking at alternatives that may suit your needs better
  5. You end up in a worse financial position than before you took their advice.

What happens if my financial adviser hasn’t acted in my best interest?

Financial advisers have a fiduciary duty to put your interests above their own. This is a legal responsibility they have to you as their client. However, there are instances where financial advisers breach this duty. When this happens, there may be various modes of recovery for the client, including financial compensation.

Michael Lalji, Shine Lawyers’ Professional Negligence Practice Leader, said cases of financial advisers providing bad advice or breaching their obligations to clients was not unusual or isolated.

If you think your financial advisor or financial planner has been negligent, it’s important to seek independent legal advice so that you understand the options that are available to you.

Shine Lawyers' Professional Negligence team offer an obligation-free consultation to anyone who has been financially disadvantaged because of bad advice from a professional. From there, our team can advise on the viability of your claim and plan a path forward.

Contact Shine Lawyers

If you have received poor financial advice and suffered loss as a result, contact Shine Lawyers so that we can advise you of your legal options.

Written by Shine Lawyers. Last modified: July 22, 2020.

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