Finding A Financial Advisor
6th April 2018
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Managing money can be challenging – not all of us have the skills to sort out the more complicated stuff. That’s when it’s time to call in the experts and get some money advice. A professional advisor can be a great help, whether it’s with day-to-day budgeting or investment advice.
Types of advice
Good financial advice should focus on our individual goals and current financial situations, and balance our short, medium and long-term needs. There are various kinds of advisors who specialise in different areas.
Budgeting help
LifeLot has a Budget Worksheet to help you get it sorted also. Keep it in your LifeLot account for access to it 24/7. (For members only, must be logged in to access).
Borrowing help
For advice on reducing debt, it can help to talk to a budget advisor, bank, a mortgage broker or financial planner. For many of us, talking to our bank is a good place to start, to make sure our bank accounts and services are right for us. Some banks have budgeting tools to help us put money aside for bills, debt repayment or saving.
Budget advisors can sometimes deal with lenders on our behalf.
Mortgage brokers help to arrange home
Insurance help
Not sure what types of insurance, or how much, to buy? An insurance broker or financial advisor can help, or try talking directly to an insurance company.
An insurance advisor will be able to offer the widest variety of products and they will also be able to help with making insurance claims.
Find an insurance broker on the Insurance Brokers Association website.
Special recommendation to -
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Investing advice
Financial advisors and sharebrokers give advice about investing in shares, bonds and sometimes property. They can help with finding us the right mix of investments. Some people also use financial coaches and mentors to help them get ahead.
Legal advice
Dealing with a complicated tax situation? Need legal advice? It might be time to talk to an accountant or lawyer. Community Law Centres provide free legal advice.
An experienced lawyer or accountant is a must when setting up a family trust. For making a will, a lawyer or a trustee company such as the Public Trust can help.
Lawyers are available on the New Zealand Law Society website.
LifeLot has a list of preferred lawyers for you to use, and if you mention that you are a LifeLot member you will receive the benefit of our specially negotiated rates. When you become a LifeLot member you will also have access to our Will questionaire template.
What Does a Good Financial Advisor Do?
A good financial advisor will give advice as to all of the following:
- What you need to do differently
- How much you need to save
- What types of retirement accounts to use
- What type of mortgage you should have, if you should pay it off, or refinance
- What type and how much insurance you need (this would include life insurance, long term care insurance, disability, and some planners also give advice on property and health insurance)
- How much to keep in your emergency fund
- What changes might improve your tax situation
- What rate of return you will need to earn to achieve your goals over a given time frame
- Whether it makes sense for you to downsize later in life
- What level of investment risk is appropriate for different types of accounts you have
In addition, many financial advisors provide estate planning advice and tax planning services.
Ask a financial advisor which of the above items they address, and ask them if they put their advice in writing. Getting recommendations is writing is always a good idea, as it leaves no question as to what course of action was recommended.
A good financial advisor will not:
- Make recommendations until they understand your goals and have run a long term financial plan for you. If you meet with someone who starts talking about a financial product right away, even if they call themselves a financial advisor, they are more likely a financial sales person.
A good financial advisor will:
- Want to gather account statements and data on all aspects of your financial life.
What it costs
Advice from budgeting services is at no charge. Advice from a bank is typically at no charge as well; however it will relate to their own set of products and services.
Mortgage brokers, insurance advisors, and financial advisors usually take commission from lenders and other financial institutions instead of charging directly.
Some advisors charge by the hour. The advantage of charging by the hour is that they will consider a wider pool of financial products, not just those that pay them a commission.
Accountants, lawyers and wealth coaches usually charge by the hour, but their advice may be very general, as there are rules around providing financial advice on specific products.
How to find good advice
There are many good advisors out there but it's a case of buyer beware when it comes to getting money advice. We need to have a good understanding of the type of advice we’re after and, if thinking about investing, our investor type.
For paid advisors, we can ask friends, family and colleagues for recommendations and interview several candidates. We need to ask the tough questions – there’s real money at stake. Checking references and talking to former or existing clients helps too.
Checking an advisor’s credentials is a must. Are they a registered financial advisor, an authorised financial advisor, or chartered accountant, for example? They should be found on the official Financial Service Providers register. A complete list of registered and authorised financial advisors is also available on the Financial Markets Authority website.
Advisors may also belong to an industry group, such as the Institute of Financial Advisors, Professional Advisors Association or the New Zealand Law Society.
If things go wrong
All financial advisors must have a complaints process and they (or the financial services provider they work for) must also belong to an approved dispute resolution scheme.
There are four:
- Banking Ombudsman
- Financial Dispute Resolution Scheme
- Financial Services Complaints Limited
- Insurance & Financial Services Ombudsman
When we contact the dispute scheme that the advisor belongs to, they will investigate the complaint.
Concerned about the behaviour of a financial advisor? We can also complain to the Financial Markets Authority.
source: https://sorted.org.nz/guides/getting-advice | https://www.thebalance.com/what-will-a-good-financial-planner-do-for-me-2388442
Related: Helpful Links | Life-brary | Preferred Insurance Advisers | Preferred Lawyers
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