What to expect

What to expect

Preparing for your first visit with an adviser is important. Find out what to expect and how to prepare.

Financial advice - what to expect

When you visit an adviser you can expect them to:

  • ask questions so that they have an understanding of your personal and financial goals
  • understand what you expect and want to achieve through their advice
  • tell you about the services they will be providing
  • explain the fees and charges that apply to their services
  • inform you of their relationship with other entities (eg: company ownership details or product sales arrangements).

The process of gaining financial advice varies depending on your situation and the adviser you are using. Generally the process will include the following:

  • Setting goals: Identifying your lifestyle and financial goals.
  • Agreeing on the scope of advice: This involves you and your adviser agreeing on the areas you wish to receive advice on.
  • Gathering information: This will involve information on your finances and research the adviser will gather on appropriate strategies.
  • Strategy development: Based on your goals and the information gathered the adviser will develop your individual financial plan.
  • Statement of Advice: The Statement of Advice is a document your adviser will give you that details your situation, their recommendations and the specific products to support this. It will also include details on fees and charges that will apply to your financial plan.
  • Implementation: Your adviser will help you implement the plan, purchase recommended products, assist with ongoing administration and provide you with regular updates and reports as agreed.
  • Review: The frequency of review will depend on what level of service you have negotiated with your adviser. Reviews may be undertaken annually, every six months or quarterly.

Documentation

Your adviser is likely to provide you with a number of documents to ensure you understand the service being offered, any ownership arrangements, the recommendations made to you, the financial products recommended and analysis undertaken.

Documentation that your adviser may give you includes:

Statement of Advice

A Statement of Advice (SoA) is a document that sets out your situation, goals and your adviser’s financial recommendations. The SoA will vary from individual to individual because it has been written with your specific circumstances in mind. However, some of the common elements SoA’s should include:

  • your personal details
  • the adviser’s details
  • the advice they've given you
  • the information on which the advice is based
  • fees and charges (including any commissions), and
  • any interests, associations or relationships that could influence the adviser’s recommendations.

Financial Services Guide (FSG)

The Financial Services Guide (FSG) provides you with all the information about the entity providing the products the adviser is recommending. FSGs include information on the identity of the provider, contact details, how the provider and any other relevant parties are paid, the complaint process and privacy policy.

Product Disclosure Statement

Whenever a financial product is recommended to you, a Product Disclosure Statement (PDS) will be given to you. It contains detailed information about a specific product including features and benefits, fees and conditions or commissions that may affect your return.

Your needs and what you want to achieve

An adviser will ask you questions to understand your current situation and what you would like your future to look like. When you see your adviser you should be prepared to discuss:

  • your financial situation, commitments and dependants
  • what you expect and want to achieve through the advice
  • your priorities
  • your risk tolerance (e.g. aggressive or conservative)
  • existing savings and any other factors affecting your finances.

The information you provide will become the basis from which the adviser will develop your financial plan known as a Statement of Advice. The more detail you provide the better equipped they will be to understand and assess your needs and develop appropriate recommendations.

Preparing for your first visit

The format of your first visit will depend on how you set this up initially. You may have even been able to gain a free initial consultation.You may need more information about who the adviser is and how they operate to feel confident in following their advice. Prepare a list of questions for the adviser. Before seeing an adviser make sure you understand the reasons you have for seeing one, your financial position and priorities.

Gather together your financial documents and have them on hand in case you need to refer to them. Your adviser will ask you questions about your financial position so it is helpful to have a good understanding of these details.Before going to the meeting you might like to review your existing budget, your level of super and savings, your income, your family situation and any lifestyle changes you foresee that may affect any of these.

Fees and arrangements

What fees are involved with financial advice?

Fees and charges attached to financial advice can vary, so it is important you understand what your upfront fees and ongoing costs will be for the advice you are receiving.

Fees and charges are generally paid by either one or a combination of the following methods:

  • percentage of the total funds you invest
  • an initial and/or ongoing commission
  • an hourly rate
  • a flat fee

The method of remuneration for advisers can vary, make sure your adviser clearly explains your options and ensures you understand how this will affect you now and into the future.

Your adviser should clearly communicate and you should agree on the services to be provided and fees to be paid, before moving ahead with your plan.

Arrangements with other organisations

An adviser must disclose ownership arrangements and any affiliations they have with other organisations. Knowing this information will assist you in making informed decisions regarding the type of adviser you prefer to work with and in assessing their recommendations.