- Every licensed financial adviser is listed on ASIC's Financial Advisers Register. The first thing you should do is check that the name of any adviser you are considering seeing is on this register.
- Always read and understand your adviser's financial services guide (FSG). It explains who they are, who they work for, what they do and how they get paid.
- Make sure the adviser has the right qualifications and experience for your situation.
If you decide to seek financial advice, you should make time to find a good financial adviser who is suitably qualified to help meet your personal and financial goals.
Some people speak to their friends, family and colleagues for a recommendation about suitable financial advisers. You may also want to ask other professionals, such as your accountant or lawyer, as they may have cross-referral arrangements in place with advisers whom they are happy and confident to recommend.
Tip
As mentioned, advisers must operate under an AFS licence. If they are not authorised, they are not legally able to provide financial advice. You should not obtain any advice from an unlicensed adviser.
Your superannuation fund
A great way to start your search is through your superannuation fund. Just about every superannuation fund has financial advisers on staff, or advisers they can connect you with.
You can speak to them over the phone, through online chat, video calls, email, or you can go in for a personal meeting. But depending on the level of advice, there may be different ranges of fees involved.
Financial products
Make sure the adviser is able to provide advice regarding the financial products you already hold. For example, the adviser may not have your current superannuation fund listed on their approved product list. If this is the case, maybe this adviser isn't very useful to you.
Industry associations
Industry associations will have lists of their adviser members to help you find an adviser in your area. Most associations require their members to undertake ongoing training, have a code of conduct for members to follow, and complaint-handling mechanisms.
Some also require members to meet specific criteria before admission into their association. Australia's leading and biggest financial adviser associations include the:
- Financial Advice Association Australia (FAAA)
- Profession of Independent Financial Advisers (PIFA).
ASIC Financial Advisers Register
The Australian Securities and Investments Commission (ASIC) requires all financial advisers to be on its Financial Advisers Register (FAR) to be able to provide personal advice on investments, superannuation and life insurance.
You can use the FAR to find out about a financial adviser's:
- employment history
- AFS licence holder that employs them or authorises them to provide advice
- training and qualifications
- memberships of professional bodies or industry associations
- areas and products on which they can provide advice
- history of any ASIC disciplinary actions (if applicable).
Check the Financial Advisers Register
Even if you find a financial adviser through your superannuation fund, an industry association or a recommendation, you should check their details on ASIC's FAR. This register will confirm if they are correctly licensed, through what licensee company, where they have worked before, their qualifications and if they have any breach notices against them. It's the simplest most important check you can do. And it's absolutely free.
Other steps
Check their financial services guide (FSG)
The FSG gives you valuable information about the services offered by the adviser, including:
- fees and cost structure (including any additional payments or benefits)
- for whom the adviser works
- links to product providers
- AFS licence number and details.
Are you a retail or wholesale client?
Essentially, everyone is a retail client unless they satisfy one of the requirements to be classified as a wholesale client under the Corporations Act 2001.
Wholesale investors are those with several millions of dollars to invest and are considered under law as sophisticated investors who don't need the same legal protections as retail investors
The problem is, however, that you may have benefited from a financial windfall, such as a family inheritance, sold your house or business, and just because you have a few million dollars you are now defined as a wholesale client.
Retail clients must receive a financial services guide (FSG), statement of advice (SOA) and where appropriate, a product disclosure statement (PDS) from their adviser. Wholesale clients are not required to receive any of these documents.
When meeting with your financial adviser, look for these signs because they are very important signals regarding how the adviser is likely to treat, or mistreat, you.
Check the adviser's qualifications and experience
You should check if the adviser is suitably qualified and experienced to help you achieve your financial goals.
Financial advisers must meet minimum training requirements, though some may have completed higher levels of education, such as a bachelor's or master's degree in financial planning or a relevant discipline. Advisers are also required to maintain their knowledge through ongoing professional development, which their licensee and/or industry body should monitor and ensure compliance.
Financial Adviser Standards
In 2017, the Australian government introduced professional standard reforms for financial advisers. This included setting up the Financial Adviser Standards and Ethics Authority (FASEA) to set education and training requirements for financial advisers.
FASEA has since been dissolved and from January 1, 2022, Treasury assumed responsibility for setting the education and training standards.
New financial advisers must complete an approved degree, undertake a professional year, and pass the financial adviser exam. Existing financial advisers must reach an education standard equivalent to an approved degree by January 1, 2026, and also have passed the financial adviser exam.
