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5 questions to ask your financial planner

07 February 2017

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Money & Life team

Money & Life contributors draw on their diverse range of experience to present you with insights and guidance that will help you manage your financial wellbeing, achieve your lifestyle goals and plan for your financial future.

Finding the right financial planner for your needs, goals and life stage is essential to help you achieve your financial goals. As a specialist profession, it's important to check your financial planner is professionally licensed and qualified to provide you with advice. Equally important is the rapport you have with them - it should be comfortable and feel like the right fit from the start. Here are five questions to ask a financial planner at your first meeting.

1. “Are you a member of the Financial Planning Association (FPA)?”

The Financial Planning Association (FPA) is the leading professional body for financial planners in Australia, representing over 12,000 members. To become a member, financial planners must commit to ongoing education and meet higher professional and ethical standards than required by law. Looking for an FPA member is a great place to start when seeking advice.

2. “Are you a CERTIFIED FINANCIAL PLANNER® professional?”

A CERTIFIED FINANCIAL PLANNER® (or CFP®) professional has achieved the highest financial planning qualification worldwide. Of the FPA’s 12,000 plus members, there are over 5,500 CERTIFIED FINANCIAL PLANNER® professionals around Australia, and most likely one near you. A CERTIFIED FINANCIAL PLANNER® professional has undertaken additional study to achieve the gold standard in financial planning.

3. “Is your firm licensed to provide financial advice?”

Check that they work for a firm that holds an Australian Financial Services (AFS) Licence, which is issued by the Australian Securities and Investments Commission (ASIC). If they are licensed to provide financial advice, you will find them on ASIC’s financial advisors register.

4. “How do you charge for your services?”

Legally, financial planners must disclose all forms of payment and fees. The cost to you will depend on the complexity of your financial situation and plan, as well as the fee method the financial planner uses. There are various ways to structure fees, and it typically starts with an initial fee to cover identifying your needs, developing a strategy and implementing the recommendations. There could also be administration and ongoing service fees for regular reviews of your plan. Ask your financial planner how they charge for their services in your first meeting – and don’t be afraid to shop around.

5. “What’s your specialty?”

Different financial planners have specific expertise in different areas, for example superannuation or retirement planning. Some are only able to advise on limited areas, so make sure your financial planner is qualified in the areas that are relevant to you and your needs.

As Dante De Gori, CERTIFIED FINANCIAL PLANNER® professional and CEO of the FPA, explains: “Financial planning is about building a long-term relationship with a trusted advisor. Your financial planner should be open to questions about their previous experience, truthful about their level of qualification and the work they offer, and clearly explain the charges to you before you decide to go ahead. At your first meeting, ask to see a copy of their Financial Services Guide (FSG) to verify everything they have told you. Ask plenty of questions and remember that good advice is concise and easy to understand.”

You can find a financial planner who is an FPA member, CERTIFIED FINANCIAL PLANNER® professional or an FPA Professional Practice here.