Recently I was interviewed for an article about what steps to take before you meet with a Financial Adviser for the first time. For most people this would be a daunting and foreign experience, so it was great to be able to share my insights. Whilst the published article can be read here, I thought it would be worth sharing my full interview responses below.
What questions does a person need to ask themselves before seeing an adviser for the first time?
1. Am I seeing the right adviser for me? Have I been referred to this adviser by someone I trust? Like any service related industry, friends/family/other trusted professionals are usually the best sources for a recommendation
2. What are the most important things to me when it comes to money? (e.g. security/freedom/children)
3. What are the key financial goals I want to achieve (e.g. buying a car /buying a home / buying an investment property / retirement at age X and on $x income)
4. If I need to, what am I willing to sacrifice (if anything) in my current lifestyle to achieve above?
5. When it comes to managing money, what isn’t working for me right now?
6. Am I ready to take advice and change for the better?
7. Are my partner and I on the same page regarding all of above? If not, what are the compromises?
What are some steps they should take to prepare?
Most advisers don’t require you to prepare much for the first meeting as a lot of the detail can be provided at a later stage if you decide there is value in engaging them. However, the below can help achieve a more effective meeting and ensure time is well spent in the first meeting:
1. Gather important documents:
a) E.g. super statements, insurance statements, payslips, tax returns
b) Household budget (if you have prepared one)
2. Ask your adviser if there is a questionnaire they can send you in advance of the meeting. Doing this means you can spend more quality time with your adviser discussing more important items
Ask your adviser if there is a cost for the 1st appointment. Some advisers don’t charge for the first meeting while some charge a small fee.
Do your homework and research your adviser, their firm and how they are licensed. Their website and/or Financial Services Guide is usually a good source for this information. As best you can prior to the meeting, you want to make sure the adviser will be a good fit for you and your needs
What questions should they always ask the adviser at the first meeting?
1. How will engaging you as my adviser provide a better outcome than managing my affairs myself?
2. How have you helped others in situations like mine/ours? Ideally, you want someone who has experience client’s in similar situations
3. What is your investment philosophy for clients? Ensure the response makes sense to you and is something you are comfortable with
4. What does the process look like after this meeting? What am I responsible for and what you are responsible for?
5. What conflicts do you and your business operate under? i.e. other than serving my best interests, what can influence the advice you will ultimately provide me?
6. How do you charge your fees? e.g. is it a flat-fee / % fee / commission based? How is the initial fee worked out?
7. Are you proposing an ongoing service arrangement? If so, how often do you propose we meet and how do you charge for this?
8. How many people are in your team and who will I be dealing with the most. What if you (the adviser) leaves this firm?
Final Word
Considering seeing a financial adviser for the first time is a great first step, and one that not many take. Most people who avoid seeing a financial adviser seek advice from their friends, family, colleagues, the internet, or DIY books. Whilst this approach can work for some, most will find it difficult to know how to apply a strategy to their unique circumstances or have the discipline and accountability to see the plan through. Anyone can benefit from financial advice, not just the affluent, but it’s important you speak to one that suits you.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
