‘What’s the best way to find a truly independent financial adviser?’

Q: What’s the best way to find a truly independent financial adviser, with no ties to any financial product provider? And is this the sensible thing to do, given what’s come out of the banking royal commission?   

This has always been a great question to ask, even before the revelations from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. In my opinion advisers who are not aligned with banks or other large financial institutions are more likely to give unbiased advice. There are still great advisers with these institutions but the culture and remuneration practices mean advice is not always in the best interests of clients. The ideal adviser is independent, experienced, qualified and well regarded. There are a number of things to look for: 

• How do you pay for the advice? If the payment is connected to particular products or institutions they recommend then beware. The best method is fully transparent ‘fee for service’ based on the complexity of your affairs.
• What experience and qualifications do they have? Are they a member of a professional association? Check the register of financial advisers on the Australian Securities and Investments Commission website.
• Who are they connected with? They could have their own licence or be licensed through what is known as a ‘dealer group’. Ask if the dealer group is owned by a bank or other large institution.
• What is their investment philosophy? Do they recommend products or services connected to their dealer group or is it independent?
• Are they prepared to give a reference for you to check? Asking an existing client about their experience is invaluable.
• Are they easy to understand? Be wary of economic jargon designed to get you to say, “OK, that’s over my head, but I trust you”. Good investment advice is something you can understand. If you can’t understand it but want to, a good adviser will work with you until you do.

Your relationship with your financial adviser is vital.  I was a financial adviser for more than 30 years until I retired but I still use an adviser. It is important to trust the management of your wealth to a financial advisor who is reliable, honest and has your best interests at heart.

If you have a question for Starts at 60’s money experts, email it to [email protected]. 

IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.