ANSWERS TO COMMONLY ASKED QUESTIONS ABOUT FINANCIAL PLANNING AND FINANCIAL PLANNERS
Question 1: Do financial planners need to be licensed to give advice?
Answer: Yes, all advisers are required to be an “authorized representative” of an AFSL (Australian Financial Services Licensee). The license provider could be a financial institution or other organisation that meets the ASIC criteria. Cost and the complexity of operating an AFSL generally prohibits individuals from establishing their own AFSL.
Question 2: What requirements need to be met by financial planners when giving advice?
Answer: The key principles to which financial planners must adhere include a requirement to “know their client” and “know the product” being recommended. This means that the client’s personal and financial needs, objectives, risk tolerance etc must be well understood and any strategies and/or products recommended must be relevant to these facts. Most recommendations will be provided in written form, detailing your situation and needs, the reasoning behind the recommendations made and any fees/costs that you will incur. Any interests, associations or relationships that could influence the adviser’s advice must be disclosed to you. Most importantly, the adviser must be able to demonstrate that the advice provided is in your “best interests”. As a certified financial planner I always strive to deliver on these requirements to the best of my ability, and you will note, have created tools to help me serve you better.
Question 3: Do I have any recourse in the case of a dispute?
Answer: All financial planners must have a “dispute resolution process” whereby they will try to solve your complaint in the first instance. If you remain dissatisfied with the outcome, the matter can be referred to AFCA (Australian Financial Complaints Authority). Both the adviser and their License provider (AFSL) hold professional Indemnity insurance.
Question 4: Does my personal information remain confidential?
Answer: Yes, your advisor cannot disclose any information to a third party without your consent.
Question 5: Do I need a lot of money to be able to engage an adviser?
Answer: No, advice regarding many issues can be sought and a time based fee charged. Given the removal of commission based remuneration for investment placements from July 2013 and the wide range of client needs, the size of capital available for investment purposes is often immaterial. The benefits of paying a fee for advice outweigh the disadvantages! This includes improved quality of service. After we agree scope of work I will be clear on the fees I will charge so there is no confusion.
Do you have a question for me, if so simply send it to me via the form on this page, I will seek to answer it and perhaps share it and the answer with others on this page (without disclosing any identifying information).
Please refer also to our Financial Services Guide for more information.