CHOICE applauds new financial planning rules

Assessing your adviser

• Licence: Check your adviser’s authorisation to provide financial product advice with ASIC.
• Read the financial services guide to find key details such as ownership and independence. Licensed advisers must provide an FSG before you start dealing with them. 
• Ask about your adviser’s qualifications, training and experience. According to the FPA, “the minimum standards required under RG146 [the legislation] are inadequate for the delivery of quality advice and therefore create a risk of consumers acting on information provided by providers that are not appropriately or professionally qualified, may not have the skills required to explain complex concepts, and may pass on inappropriate advice without consideration of the principles of financial planning.” The FPA's Certified Financial Planner designation is a higher qualification.
• Professional association: Are they a member of a reputable professional financial planning association? Codes of practice, accountability standards for members and internal complaints systems for dealing with complaints may give you extra assurance. However, association membership is not a guarantee of good advice.
• Find out which types of financial products, and which providers, the advice covers. Many advisers owned by large banks, for example, do not recommend industry super funds and other investments that don't pay commissions. 
• Check what research is used by the adviser to create their lists of recommended investments.
• Study the product disclosure statement(s) (PDS) for any recommended products.
• Get a written Statement of Advice and clarify any parts you don’t understand.
• Get a second opinion if you’re in any doubt about the advice you receive.  
• Coming soon: check complaints about advisers and companies with the Financial Ombudsman Service.
• Due diligence: Educate yourself about the advice provided and the strategies and products recommended, and ensure you’re fully satisfied that they’re right for you.

Contacts

• Australian Securities and Investments Commission (ASIC): to check an individual or company is appropriately licensed to provide financial advice.
• FIDO: ASIC's consumer information website.
• Association of Financial Advisers : membership organisation for financial advisers.
• Financial Ombudsman Service : for complaints.
• Financial Planning Association : the largest industry association for financial advisers, including Certified Financial Planners (CFP).
• Independent Advice: a website providing contact details for some (not all) independent advisers.