If you're planning on buying a house, setting some long-term financial goals or wondering what to do with a lump sum of cash, you might be in need of some professional financial advice. 

Financial planners and advisers can make managing your money a whole lot easier, but it's important to know who you're dealing with, what they can do for you, and what's in it for them. It's also important to avoid unscrupulous advisers at all costs.

There have been several cases in recent years in which dodgy financial advisers have convinced unsuspecting consumers to invest their super into inappropriate, high-risk property schemes with promises of high returns. Examples include the Shield Master Fund, First Guardian Master Fund and Sterling Income Trust managed investment schemes. 

When these schemes collapsed, thousands of people lost their life savings. In all three of these cases, financial advisers used a lead generation model, getting contact details for their clients from telemarketers or from 'click-bait' ads on social media offering free comparisons or 'health checks'. These are never good ways to find a trustworthy financial adviser.

On this page:

• What's the difference between a financial planner and a financial adviser?
• Do I need a financial adviser?
• How do I find a good financial adviser?
• The red flags to watch out for
• How to prepare for a financial planning session
• What happens at the first meeting
• Negotiating your price
• Assessing and reviewing financial plans
• What to do if you have a problem with your financial adviser

What's the difference between a financial planner and a financial adviser?

Basically, there is none. A financial planner and a financial adviser are both professionals who (hopefully) know more about how to invest, manage and save your money than you do. 

Financial planners tend to be more focussed on helping you create a long-term financial plan, like saving for a house or for your child's education. Financial advisers tend to be more focussed on helping you make decisions about financial products, like choosing a super fund. In practice, many planners and advisers do both.

Both financial planners and advisers have educational requirements. In most cases, they need a bachelor's degree in a relevant field (e.g. accounting, financial planning or finance). A financial planner should be properly accredited as a Certified Financial Planner (CFP) or gain a certification from the Financial Advice Association of Australia (FAAA). 

Anyone who provides advice to a retail consumer about financial products needs to be registered with the Australian Securities and Investments Commission (ASIC), meet minimum education requirements and pass the financial adviser exam.

Do I need a financial adviser?

If you're just trying to save money or sort out your superannuation account, you probably don't need to hire a financial adviser. For example, you can create your own simple budget or savings plan, either through a high-interest savings account, term deposit or other straightforward savings strategy using tools from Moneysmart.

But if your financial life has gotten complicated, a good adviser can be a major asset when it comes to making the right long-term financial decisions.

It could be a good idea to consider an adviser when:

• planning for your family's long-term financial health, in particular buying a home
• considering your options if you've been laid off
• planning for retirement.

The first thing to decide is whether you really need a financial adviser at all.

Types of finacial advice you can pay for 

The different types of financial advice available can be roughly broken down into three categories.

1. A one-off issue

You may have come into a bit of money or want to figure out the best way to consolidate your super funds. A one-off, fee-for-service visit to a financial adviser should cover this.

2. A long-term plan

If you're at that point in your life where you want to establish a specific strategy for a healthy financial future – including investing in the share market or bonds, tax advice or buying a house – an experienced and knowledgeable financial adviser can provide some very valuable tips.

Unless your financial life is complicated, a single visit that you've prepared well for should set you on the right course. If things become unclear or uncertain in the future, you can make another appointment, but you won't need to start the plan all over again.

3. Ongoing advice

This is only necessary if you have substantial assets and a sizeable investment portfolio. If your financial life has lots of moving parts, you'll want ongoing advice about the best strategy to meet your goals.

We don't think consumers should be charged according to a percentage of their assets – after all, one percent of $200,000 is a lot more than one percent of $100,000, and the adviser arguably doesn't have to work any harder to give advice on the higher amount. Instead look for advisers that charge fees based on the amount of work the adviser is doing and the different services they are providing.

Many people consult a financial adviser when they want to invest in shares or buy a house.

How do I find a good financial adviser?

FoFA-compliant

The Future of Financial Advice (FoFA) reforms have largely put an end to conflicted remuneration, meaning financial advisers are no longer allowed to recommend products or strategies based on the commissions they stand to make. In short, they have to put your interests ahead of their own. 

The glaring exception is general insurance, life and other risk insurance and consumer credit insurance products, which are exempt from the reforms and where commission-driven advice remains a major concern. The current commission caps on life insurance are 60% of the first year's premium and 20% on subsequent years. The commissions would be woven into your premiums, meaning that you're paying for them. As of July 2025, however, financial advisers recommending insurance products must obtain consent from the client before receiving commissions.

Licensed

Your adviser should be registered with ASIC and licensed to provide advice or be the authorised representative of a financial services licence holder. You can check that your adviser is registered with ASIC and that the licence holder is licensed with ASIC.

Expertise

One size doesn't fit all in financial planning, so shop around to find a adviser that's right for you. In particular, ask if the adviser provides comprehensive advice or if they're an investment and placement service only. In short, make sure they really have expertise in the area in which they're offering advice.

The red flags to watch out for

The cardinal rule in finding a trustworthy financial adviser is that you should go looking for them, not the other way around. If you receive a cold call from someone offering you financial advice, say no thanks and hang up. The same goes for offers of free super health checks or winning investment strategies online or through social media. Simply ignore these offers and keep scrolling. 

Another major red flag is the promise of unreasonably high returns. No financial adviser has a crystal ball – they can tell you about the past performance of an investment, but they can never guarantee what the future holds. 

Many major super funds have seen bumper returns of 8–9% in the last few years, but in the case of the Shield/First Guardian debacle – where around $1.1 billion of investors' money was lost – annual growth rates as high as 15% were touted. We think anything above 10% is questionable and probably an indicator that you should be sceptical. Remember: the higher the return, the higher the risk.

If you receive a cold call from someone offering you financial advice, say no thanks and hang up

Finally, beware of time pressure. A good financial adviser will want you to take the time to read through your financial plan (also called a 'statement of advice') carefully, understand the strategy they have created, ask questions and confirm you're comfortable going ahead with their recommendations. 

Anyone who pressures you to act quickly on a big financial decision is not acting in your best financial interests. A good financial adviser also won't go ahead with changing your investments without your active written consent. Steer clear of financial advisers who say they'll go ahead with an investment strategy unless you tell them not to – also known as the 'negative consent' model. Your informed consent should be mandatory for everything a financial adviser does with your money. 

How to prepare for a financial planning session

If you need to create a full-scale financial plan, doing your homework in advance will make all the difference in how the session turns out. It'll also help you get the best out of your adviser.

• Prepare a household budget detailing all sources of income and summarising your living expenses.
• Make a list of all assets and their value, and all liabilities (credit cards and other loans).
• Make a list of your financial needs and goals for the short, medium and long term.
• Learn as much as you can about different investments and markets.
• Think about how much risk you're prepared to take when investing.
• Make a list of all existing investments, including information about their current value, past performance and fees.
• Get up to speed on information your adviser may not have access to, such as whether your employer is able to channel more of your salary directly into super ('salary sacrifice') or options within your existing super fund.

What happens at the first meeting

The adviser should use the first meeting to analyse your needs, goals and risk profile. We suggest you use it to analyse the adviser's professionalism and ability to meet your requirements.

• Request a copy of their Financial Services Guide (FSG) to be sent via email, fax or post before your first meeting – and be sure to read it.
• Discuss the adviser's background and qualifications.
• Give the adviser as much information as possible about your personal situation, needs, timeframe and attitude to risk.
• Discuss whether there are any limits to the advice they can provide.
• Find out exactly who the adviser works for and ask if they have any preference for a particular type of investment or fund manager – if so, ask them to justify it.
• Find out about their professional indemnity insurance, what it covers and to what amounts.
• Ask if they have their own 'wrap' account or master trust and if these are likely to be recommended over other investments and, if so, why.
• Gauge the adviser's attitude to strategies like gearing (borrowing money to invest). Does it match yours?

Pricing structures offered by financial planners should be flexible and give you room to negotiate.

Negotiating your price

Find out exactly what you'll pay for the advice given. Don't assume the fees outlined in the FSG or described by the adviser are set in stone. Advisers don't usually tell their clients that pricing structures are flexible, but you can and should negotiate.

Assessing and reviewing financial plans

If you get comprehensive financial advice, your adviser will create a comprehensive financial plan for you, usually called a 'statement of advice'. It should be easy to read and understand and should clearly explain how the recommended action will meet your goals, and why this option is better than others.

The comprehensive plan your financial adviser gives you should contain the following.

• Page numbers, table of contents and executive summary.
• Accurate and thorough representation of your current financial situation, future needs and goals.
• Accurate and thorough representation of your risk profile and investment time frame.
• Assessment of your current investments and justification for any recommendation to sell or keep them.
• Information about your current tax position and an explanation of how the advice will change that position.
• Assessment of your retirement needs.
• Assessment of your insurance needs.
• Assessment of your estate planning needs.
• Easy to understand information about what the adviser will earn from your investments.
• Independent and up-to-date research on any products recommended.
• Explanation of how any strategies or investments recommended match your goals, needs and risk profile.
• A spread of different investment types from a range of providers.
• Explanation of how recommended investments compare with similar products in terms of fees and performance.

If you get limited advice – advice on a specific question or topic – your adviser still needs to create a plan (statement of advice) for you, but the plan will be limited to covering the things in the list above that are relevant to that topic or question.

If a plan fails to provide any of the above, ask the adviser to fix it until you're satisfied, or reject it.

Ongoing reviews

Most advisers offer ongoing reviews (usually annually) and portfolio management. No plan should be 'set and forget', but a simple review of your plan for an agreed modest fee is usually adequate unless your circumstances have changed.

What to do if you have a problem with your financial adviser

If you're concerned about the advice you've received or you have reason to think a financial adviser may not be acting in your best interests, you should start by discussing your concerns with the adviser, and then follow the complaints process as outlined on ASIC's Moneysmart website, problems with a financial adviser.

Crucially, you should lodge a complaint as soon as you're sure there's a problem, first with the advice firm itself and then, if you're not satisfied with the result, with the Australian Financial Complaints Authority.

If you have invested your super in the Shield Master Fund or First Guardian Master Fund, or aren't sure if you have, learn what you need to know about Shield and First Guardian Master Funds.

Stock images: Getty, unless otherwise stated.

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