Professional financial advice needs to be a serious consideration when looking at buying a house, setting long-term financial goals, and considering investment options.
Before you make the call, be sure to do your research and know what you’re dealing with.
Think, what’s in it for them?
Some financial advisers receive a commission based on recommending particular investment options, so make sure it’s clear what the circumstances are around this.
New Reforms You Need to Know About
Best interest duty
A financial adviser must act in the best interest of the client, not in their own best interest. Practically speaking, this means an adviser can’t recommend products or strategies that increase revenue for the adviser but may not be appropriate for the client.
Fee disclosure statements
It is now mandatory for all financial adviser clients to receive fee disclosure statements, including those who started receiving advice before 1 July 2013.
The ban on conflicted remuneration – or commission-driven advice – applies to all financial product advice (also called general and personal advice). Advisers shouldn’t be recommending products and strategies that earn them high commissions.
Do you REALLY need an Adviser?
Not everyone is in the position to seek out an adviser, and that’s okay. If you’re just trying to save money or sort out your superannuation account, you probably don’t need to hire a financial adviser. You can talk to your super fund about your investment allocation and what it means, and you can devise your own simple savings plan, either through a high-interest savings account, term deposit or other straightforward savings plans.
When you SHOULD be Seeking Advice…
If you’re seriously looking at how you can save for your family’s long-term financial health, in particular buying a home, a financial adviser is a good idea. In addition, those recently retrenched or soon-to-be-retired have a lot to gain from professional advice.