9 key questions to ask a financial planner

The Experts

9 key questions to ask a financial planner

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Investment advice – when it comes to your money, it’s crucial to ensure you’re getting the right information. The right financial advice will help you build wealth. So how do you find a financial advisor you can trust?

Peter Switzer, financial commentator and founder of the Switzer Daily, admits there are some dodgy dealers out there.

“Yeah, I know that financial planners don’t have good enough reputations, especially in light of the Storm Financial failure and others such as Westpoint, where dumb or criminal advisers mislead their clients so they could pocket big, hidden commissions,” says Switzer.

“But I believe the vast number of advisers are decent people, who want to do the right thing for their clients. That’s how we operate at Switzer Financial Services and that’s a fact.” 

Is the price right?

One issue causing grief in the world of a financial planning is pricing – that is, what financial planners charge and how they charge it.

“Some advisers have taken commissions and other payments from financial institutions and haven’t been as transparent about what they do,” says Switzer.

“This can lead to product selection for clients that could mean the interests of the adviser came before the client’s.”

Switzer calls for total transparency and nothing less.

“Others charge percentage-based fees and while this is okay if the dollars charged is clearly specified to a client, it can lead to over-charging. That’s why I say transparency about what the adviser receives and what the client actually pays is crucial.”

To draw up a decent plan takes anywhere between 10 and 15 hours, sometimes more for complex situations.

“There is a lot of work and responsibility with a financial plan,” says Switzer. “Plans generally should cost between $3000 and $5000 and they are not tax deductible, which is something the Federal Government should change. Your first visit to an accountant is tax deductible.”

After the initial plan, ongoing advice is tax deductable.
Questions to ask

So what sort of advice do you need to seek? Switzer says while some people need ongoing help while others don’t, but a first plan should be considered as it could answer key questions such as:

  • Should I be saving more for retirement?
  • Could I have a better super strategy?
  • Should I have investment properties?
  • Am I working the tax system to my advantage?
  • Should I pay off my house quickly or should I get into super salary sacrifice?
  • How can I plan for my children’s education expenses?
  • Can I use borrowing to quicken up my wealth building?
  • What estate planning do I need?
  • And how should I invest my money between all of the competing assets out there, which help to build wealth?

Take a punt

It’s important to remember that while financial advisors have insights working in the investment game, but there’s always a degree of punting when it comes to investment.

“That’s why many advisers play it conservatively, relying on historically good performing funds. But this approach doesn’t always work out, as the last market crash showed,” explains Switzer.

“An adviser’s biggest gift to clients comes with answering the questions above. To secure great returns for 20 years but to be over-taxed because you don’t know the ins and outs of the tax system could cost you a packet.”

 

Published: Thursday, March 03, 2016