For many people, buying a house effectively takes all of their money as well as committing them to a hefty mortgage for the next 30 years or so. As a result, buyers rightly tend to conduct a great deal of research before choosing their ideal property.
You may think the research focuses almost entirely on setting search parameters such as location, price, number of rooms, block size and optional extras such as whether you want a pool, followed by a search for the right property before negotiating a price and making the purchase. However, there is also a building and pest inspection to determine whether the property is 'as advertised' or contains other flaws. There is a title search conducted by your lawyer to ensure that the person selling the property is the owner and has the legal right to sell the property. And don't forget the choice of mortgage lender to ensure you get the best financial arrangement for your circumstances.
In contrast, when choosing a financial adviser, many people simply rely on a word-of-mouth recommendation from a friend or relative.
But why should that be the case? Your financial plan will cover most or all of your savings, just like a property purchase. With that in mind, here are a few tips to ensure you get the financial advice you deserve.
'Word-of-mouth' is a good starting point
While it shouldn't be the only search criteria, positive feedback from people you know and trust is a good starting point. Just check that they aren't simply participating in a 'refer a friend' promotion for the financial adviser.
License and qualifications are musts
Having narrowed your search, check that the firms under consideration are licensed and qualified. This can be done via a search at asic.gov.au. Firms are legally required to provide you with their Financial Services Guide covering things like their services and fees before you engage their services.
Look for experience as well as relevance
Like any complex process, understanding financial strategies and the investment markets takes time, otherwise everyone who invested would be a millionaire. Consider the experience of the firm overall, as well as that of your adviser. Keep in mind however that legislation and financial markets are constantly changing so you also want an adviser who understands current events and their potential impact on your financial plan.
Look for advice that gives you the most options
Some financial advisory firms are affiliated with particular financial institutions, which may heavily impact the focus of their investment selection or lack of options. Look for an adviser who is happy to consider all strategies and investment options on their merit.
Do they suit you and your philosophy?
While you may not be an expert in financial markets or changes in the superannuation rules, you will have your own comfort levels and your own personal goals or ambitions. What's most important to you that you want to achieve? Do you want to ensure your kids are comfortable? Is maintaining health a focus? Do you want high risk, high return? Would you prefer a steadier approach? Do you want to develop a property portfolio? Or are you keen to invest in stocks?
Having an adviser who will listen attentively to what's important to you and who is willing to tailor your plan to your preferences, will result in a strong working relationship that will provide the best results.
Olivia Maragna is the co-founder of Aspire Retire Financial Services and is a respected and independent financial expert. Olivia's advice is general in nature and readers should seek their own professional advice before making any financial decisions.
