B Invested

5 questions you need to ask your financial planner.


Engaging a financial planner is not a decision to take lightly. While a good one should help you to achieve your financial goals, a bad one could throw your long-term livelihood into jeopardy.


Whether or not you are choosing a planner for the first time, or reconsidering your existing one, you shouldn’t be afraid to ask the hard questions – after all, it’s your financial future at stake.


Ask and you shall receive.

Nathan Birch, CEO of Binvested says anyone considering the services of a financial planner has the right to ask questions.


It is your money and it is your long-term livelihood, you need what is best for yourself and for your family.


He cautions not to feel guilty if you want to leave one financial planner for another. While the client/planner relationship tends to build up over time, you still need to put your money and the livelihood of your family first.


He says, if you are considering engaging a financial planner, you might want to ask them the following five questions.


1) What do you have experience in?

When choosing a financial planner, it’s not the amount of experience that counts (although this is important too), it’s the type of experience they have had that matters most.


Many planners specialise in one particular field, such as insurance or retirement planning.


The best type of planner is one who has had a wide exposure to the different fields of financial planning, and who can understand how multiple markets work.


Are they able to do the best thing for the client in relation to different kinds of strategies?


A lot of planners don’t do retirement planning.


Other planners purely do insurance.


You will probably need a planner that does everything.


2) What are your qualifications?

Have you ever come across an ‘expert’ with a long list of credentials that sound impressive, but you have no idea if their qualifications are relevant or worth anything in the eyes of their peers?


Rather than just accepting the qualifications of a planner, it might be worth looking beyond the pieces of paper that they were printed on.


Looking at where the qualifications come from is a good starting point. Only a handful of institutions offer financial planning courses, so you should be able to ascertain whether they are bona fide or not fairly easily.


Another thing to consider is the type of qualification, and what it enables them to do. For instance, are they qualified to give advice on SMSFs or insurance? What exactly are they qualified to give advice on? Do they have a degree?


You can also check to see if they are registered with ASIC.


3) What can you offer me?

This is the sort of question that may end up in a long-winded speech from the planner about how good they are or how much money they have made for other clients.


But, what should you be looking for in a financial planner?


A good financial planner should be able to tailor a strategy to meet your needs.


Qualities you should look for include professionalism and someone who listens carefully to the client. At the first meeting, a good planner should ask you a few questions and then let you do the rest of the talking. This will enable them to know as much as possible about your situation and goals in order to give you the best advice.


It is a good idea to shop around so you can compare different planners before choosing one who you feel the most comfortable with.


If you don’t feel comfortable with your planner, the strategy probably won’t work because you will be clashing heads.


4) Are you independent, or are you aligned to a company?

While independent financial planners have access to a wide range of investment products, those who are aligned to a financial institution can typically only offer the products of that institution.


This is unfair for the client, as it greatly limits their options.


Shopping around will help you to compare what each planner can offer in order to gauge any limitations.


5) If you do become my financial planner, what ongoing services do you offer?

It’s not just the initial meetings that matter – the ongoing service they offer is just as important.


If the client is paying an ongoing advisor fee, they are paying for a service.


This service usually involves at least two meetings a year in which the advisor updates the client on the performance of their investments.


On top of this, the planner should be available throughout the week in order to discuss financial matters with you. If you are interested in a new investment or have any questions, you should be able to discuss these with your advisor without any unnecessary drama or lengthy delays.  


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Disclaimer: The information written in this blog is not financial advice.