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Getting Financial Advice

How can this guide help you?

The ADF Financial Services Consumer Centre and the Australian Securities and Investments Commission (ASIC) want you to be well-informed and confident about getting financial advice.

By familiarising yourself with this website, you’ll be starting off on the right foot with tips about:

  • deciding if you need personal advice
  • finding the right adviser
  • working effectively with your adviser
  • getting advice that suits you.

You may find that not all the ideas in this website may apply to your particular circumstances.

Essential facts about financial advice

Key tips for getting advice

  • Deal only with a licensed financial advisory business
  • Take the time to find the best person for your needs
  • Make sure the advice suits you and offers value for money

Throughout this website we have used tables to work out budgets and so on. Copy them and add your own details to see how our suggestions might work for you.

Essential facts about financial advice

What is personal financial advice?

Financial advice helps you make decisions about your money. Personal advice considers your own objectives, financial situation or needs, and then recommends strategies and one or more financial products to suit you.

Good advice from an experienced, well-informed financial adviser can help you save money and become more financially secure.General advice and financial information, that’s not personalised for you, can also be extremely useful.

Who can give you personal financial advice?

Generally, the only people permitted by law to give you personal financial advice are those who work for, or represent, a financial advisory business that holds an Australian financial services (AFS) licence. Licensed advice covers superannuation, insurance, shares, managed funds as well as many basic banking products.

Advice about loans and buying real estate does not require an AFS licence. An advisory business that gives personal advice must:

  • give personal advice that suits you
  • take legal responsibility for its staff and representatives
  • act efficiently, honestly and fairly
  • meet standards designed to protect you against something going wrong.

Do you need personal financial advice?

Life Stage Advice you may need Benefits and cost of personal advice
Planning to retire Detailed advice about how to get the most income in retirement, without taking undue risks. Can save tax and make you eligible for valuable government benefits, including age pension.
Early separation from the ADF Advice about what to do with your payout (including superannuation). Advice can avoid expensive mistakes.

 

Depending on your circumstances, can be fairly costly. Check fees and any commissions that apply. May better suit people with larger payouts.

Changed financial needs, for example:

  • having children
  • inheriting money
  • paying off the mortgage at last
  • separating from your partner
Managing your new situation, broad advice about suitable strategies. Possibly recommendations about what financial product to buy. Advice can help you take control and make the most of your money and avoid expensive mistakes.

 

Depending on your circumstances, can be fairly costly. Check fees and any commissions that apply. Learning more about money and doing some of the basics yourself may be a less expensive option.

Personal advice can be valuable, but will take time to prepare and will cost you money. Not everybody needs personal advice. Many people handle their own finances successfully, including looking after their super, insurance and investments.

You will have to put in some time and be willing to learn. There’s a lot you can do to teach yourself about financial matters, as discussed in this website.

Personal advice often helps most at turning points in your life. Here are some typical situations.

What’s it going to cost?

Advisory businesses set their own fees, and can charge a commission on products they sell a percentage of the assets they’re looking after by the hour for the work they do. You may be charged a combination of all these fees. Commissions and yearly percentage charges are very common.

You’ll get a financial services guide that explains the adviser’s fees. Be prepared to shop around and to ask advisers to explain the benefits you’ll get for the money you’ll pay.

Find out more about the importance of fees and commissions later in this wes bite. You’ll also pay fees to the company that issues the financial products you buy. These are set out in the product disclosure statement.

What advice do you want?

You’re much more likely to get good advice if you prepare in advance. Take a close look at your financial situation, and think over what you want advice about.

Gather your personal information

Your Goals What sort of lifestyle are you looking for?What are your priorities?

What do you want to achieve financially?

Who depends on you financially and what do you want to provide for them?

What you want your adviser to do? Give you an overall financial plan?Advise you on a particular problem and compare various options?

Check you have not overlooked something important?

Just set things up for you, or help in future as well?

Good personal advice builds on good personal information. The more your adviser understands about you, the better their advice should be. Before seeing an adviser, collect this information:

  • What do you own and what do you owe? Your assets include your home, super, car, shares or other investments and personal property. Your debts include mortgages, loans and outstanding credit card balances.
  • What are your income and expenses? ASIC’s Budget Planner (available through FIDO at www.fido.gov.au) can help you collect this information.
  • Do you have insurance? What for and for how much?

Work out what you want

Make some notes about what you want before you start looking for an adviser. Your notes can help you choose and, later on, check that the advice will meet your needs. (It’s fine if you change your mind about some of these matters later.)

Choosing your adviser

Choosing your adviser is an important personal matter. Do some research and aim to talk with a few advisers before you decide. Some will do a better job than others.

There are plenty of advisers to choose from. Look for someone who

  • will put your needs first
  • works often with people in your situation
  • will fit in with you personally.

Shopping around for an adviser may seem time-consuming or feel awkward, but it’s much better to shop around now than have a bad relationship later.

How to find some names

Talk to your family, friends or ADF colleagues or anyone who’s seen a financial adviser. Find out about their experiences and whether they have been happy with their advice. Ask about the good points and the pitfalls.

Only talk to advisers who are employed by or are authorised to represent a licensed advisory business. ASIC licences and regulates the financial advisory industry so that it operates efficiently, honestly and fairly. You can check licence details,or see if ASIC has banned someone from advising, for free through its consumer website FIDO or by phoning 1300 300 630 (or +61 1300 300 630 if you are posted overseas). Licensing gives you more protection if something goes wrong, including the right to a free and impartial hearing of consumer disputes.

Start with the financial services guide

Your advisory business worksheet
Advisory business
A
Advisory business
B
Advisory business
C
Name of advisory business
Name of AFS licence holder if different
Owned by or associated with any other companies?
Services offered

Seems relevant to your needs?
Yes/No

Products restricted in any way?

If yes, how? For example, they recommend only their own brand or their parent company’s, or limited range?

Fees and charges

Initial advice fee?

How are advisers paid? For example salary only, salary plus bonus on sales, commission only

Phone each business and ask them to send you their financial services guide. All licensed advisers must produce one. If they don’t send it, cross them off your list straight away.

Use the advisory business worksheet to collect key information about each adviser, so you can easily compare their services and costs. If you can’t find the answer in the financial services guide, make a quick phone call to find out.

Who owns the business?

Ownership of the business can affect the services and products you’re offered. For example, an advisory business may be allowed to offer only the parent company’s products.

Many advisory businesses are owned by major financial institutions like banks, fund managers and life insurance companies. Even if they operate under a different name, the financial services guide will tell you if they’re owned or associated with other companies. Only a few financial advisory companies are independently owned.

Services offered

Check if the services offered cover your needs.

For example, product restrictions can affect you. We’ve already mentioned that some businesses are limited to products issued by themselves or their parent companies. Other businesses may offer a wider selection, but may not cover the whole market. This restriction can be especially important with super, because the adviser may not cover your fund. If your potential adviser is not allowed to give full advice about your fund, it may be difficult to advise you. (For example, many advisers don’t advise about industry funds, see ASIC’s free booklet Super Choices.) While this isn’t an issue for ADF personnel who are automatically placed into Military Super, if someone in your family who isn’t in the ADF is making a decision about super it may be.

Fees and charges

You will often pay a once-off fee for getting advice.On top of that fee, most advisers get paid commissions and bonuses on financial products you buy. Often they could earn more if you buy a particular product compared with another that could be just as good or even better. This can set a up a conflict of interest between what’s good for your adviser and what’s good for you. (The law deals with this potential problem by requiring advisers to manage conflicts and also to tell you about all commissions.)Good advisers put your interests first anyway, but bad advisers may not. We’ll come back to this issue when we discuss the products your adviser recommends below.

What if an adviser calls you?

Take care if you get called out of the blue. The caller may be selling advice or products that do not suit you or may be a scam.

Telemarketing or ‘cold calling’ potential clients breaks the law

  • if the caller has no licence
  • if the caller tries to sell you investments or financial products without following strict legal safeguards.

Even if a licensed adviser is calling you to come in and get advice by following all the steps we outline in this website, please take care. Think first about what you need, and see other advisers as well. With telemarketing, the salesperson has selected you; you have not selected them.

Setting up the first meeting

Contact the business and make an appointment to talk with one of their advisers. Ask to speak with an adviser, not a junior employee, and say you’ll need about 30 minutes.

Say that you’re looking for an adviser who would best suit you, and you don’t want any advice or to fill in any forms or make any commitments at this stage.

For the first meeting, you’ll need

  • your notes on your financial goals and what you want from the adviser, and some brief information about your financial and personal situation. (This will help the adviser explain what they can do for you. You won’t need all your paperwork now, because this meeting is intended for you to get to know more about the adviser, not for the adviser to find out all about you.)
  • a copy of the questions we suggest you ask, see ‘Questions to Ask’ below.
  • some notepaper to write down the answers.

What to listen for

A good first meeting will involve each of you sharing the conversation.

Begin by saying you are looking for an adviser, and you feel they may be able to help you, but you won’t be making up your mind till you’ve seen 2 or 3 more. Say that you may make some notes to help you remember things. Invite the adviser to give you anything in writing that will help answer your questions.

You should get the opportunity to hear about the adviser’s experience, the kind of people they advise, the kind of financial products they advise on, and their qualifications.

Pay attention to important clues about the adviser. Do they

  • make you feel comfortable about asking questions?
  • encourage you to take your time?
  • want to understand your situation thoroughly before giving any advice?

Being talked at, put under pressure or told there’s only one right way to do things is not a good sign. You’re looking for an adviser, not a salesperson.

Questions to ask

Here are some suggested questions to keep the conversation going, with some comments about what to listen for. Choose one or two from each section, as you may not have time to ask them all.

What you need Relevant questions What to listen for
Personal experience in successfully advising people like you How long have you been giving financial advice? The more experience, the better. If less than 2 years’ experience, ask: ‘Will anyone else in the business take a look at the advice you give me’?
What kind of clients do you mostly see?

What are your clients mostly trying to achieve?

People with concerns like yours, for example, experience in dealing with ADF members.
Do you take a special interest in any particular types of financial products? Experience in the products you’re interested in: for example, insurance, super, retirement income products, shares, managed investments
Someone who puts their client’s needs first How do you go about understanding a new client? Aims to get a full picture of your circumstances and needs.

Will ask you a lot of questions.

Will probably need a separate appointment to do this

How do you deal with a client who may have conflicting financial objectives? Will explain and discuss choices with you. then does research and prepares advice for you to take away and consider
Qualifications relevant to advising What qualifications do you have? Qualifications in finance, economics, accounting, or financial planning
Reasonable fees How much is this advice likely to cost? Clear explanation of fees and commissions the adviser receives, plus general explanation about any likely product fees
High professional standards How do you keep up to date with everything that’s happening? Attends courses and training run by universities, FINSIA, Institute of Chartered Accountants in Australia, CPA Australia, or the Financial Planning Association. (Not just in-house marketing seminars.) Member of ICAA, CPA Australia, FPA, stockbrokers’ professional body, FINSIA, etc

Get the adviser to do most of the talking but keep them to the point. Ask open questions like ‘what experience do you have?’, and avoid questions that just have a yes or no answer. Query anything you feel unsure about.

How to decide

After you’ve met all your possible advisers, compare how each adviser answered your questions. Note each adviser’s strong and weak points. Score each adviser from 1 to 5 against each heading on our list of ‘what you need’.

Give a score for how you feel overall about being free to ask questions and whether you got a clear answer. Feeling pressured or uneasy can be warning signs that an adviser won’t work out for you. See who gets the highest score. Remember you’re comparing advisers, not comparing their advice.

Working with your adviser

After you have chosen an adviser, make an appointment to get your advice. This may happen in stages. For example, the adviser will first collect detailed information about you and then hold another meeting to explain the advice and hand over important documents.

You may also receive a contract or terms of engagement setting out the exact services supplied and how and when you must pay various fees and charges.

What your adviser needs to know

Give your adviser accurate information. What’s needed will depend on what advice you’re asking for. Make sure your adviser clearly understands what you want advice about, and what you’re aiming for.

Expect to tell your adviser:

  • your age and any major health problems
  • who depends on you financially or for other support
  • your income and expenses and how these may change, for example family plans, education expenses, travel, house renovations or new car
  • your assets and liabilities, including your super, insurance, tax, income and what you might inherit.

For retirement planning advice, expect to answer some very detailed questions, because your adviser will have to think about tax and social security issues, as well as your likely retirement needs. If your adviser doesn’t ask for this information, consider looking for a better one because you may end up with poor advice. If you can give only limited or incomplete information, tell your adviser. Your adviser needs to know if they have only part of the picture. They will warn you that their advice will be based only on what you have told them.

Discuss the risks you’re willing to take

At an early stage many advisers will ask you about your attitude to risk, especially if you’re likely to be making some investments. Investment advice aims to strike a balance between earning enough money to meet your needs and avoiding the risk of unacceptable losses. Advice that involves more risk than you’re comfortable with won’t work. If you’re more conservative, it’s often better to explore alternatives such as working a little longer or accepting a less expensive lifestyle.

Make sure you and your adviser agree on what’s meant by risk labels like ‘conservative’, ‘moderate’ or ‘aggressive’. All investments have risks, see ‘What are the risks and returns?’ later in this website.

Receiving your advice

Often your adviser will explain the advice face to face and then hand over various documents.

The documents must include

  • a statement of advice that sets out what your adviser is recommending and why they think it’s suitable for you
  • product disclosure statements that describe each recommended product.

Take your documents home to read before you agree to anything. Personal advice can often be detailed, and you may receive a fair bit of paperwork to consider. Be prepared to set some time aside to go through your advice carefully. You’ll probably find it easier to do this in stages, beginning with the overall strategy and then moving on to the detail. When you’re ready to look at the details, use the advice checklist on the next webpage to help you find important information.

Does the advice meet your needs?

Understanding your statement of advice

A good statement of advice will be clear, concise and effective. You’re paying for the advice, so it must be clear to you. Only follow advice that you can understand. Jot down any questions that cross your mind as you read the advice, to discuss with your adviser later.

Here’s a checklist of the most important things that a good statement of advice will tell you or help you do. If you can’t find or understand the information, ask your adviser.

Your advice checklist
Information to look for
The advice A document marked as a statement of advice.Who’s covered by the advice: you, your partner, or anyone else?The extent of the advice: all or just some of the issues you asked about?
Your needs and circumstances A correct summary of your financial and personal situation. (Check for any mistakes or anything important left out.)
What’s recommended and why What financial strategies and products has your adviser recommended?Can you see how each strategy and each product will help you achieve what you want?Why is each preferred over other reasonable possibilities?

What risks and uncertainties are associated with the advice?

What conflicts of interest may influence the advice, including adviser benefits?

What you’ll pay and what for Costs you’ll pay for the products recommended, now and in the futureCosts of switching products, including charges or loss of benefits, for example if you switch your super fundCosts of the advice, now and in the future
How you act on the advice Steps you must take to carry out the advice.Whether your adviser will review your situation in future

Do the general recommendations suit you?

Good advice makes sense and fits well with your own needs and personal preferences.

See if you can explain the general recommendations to yourself simply in your own words. Or try explaining them to a partner or friend. If you understand them, and they feel right, then you can start taking a closer look. If you feel uncomfortable or feel in the dark, there’s not much point drowning in all the details. Sort things out with your adviser.

Here are comments and issues to consider about some common general recommendations.

Recommendations Comments and issues to consider
Saving more and paying off debts Often the most sensible step. Make sure savings targets are realistic so that you can stick to them. Will you have spare cash for an emergency?
Getting tax and government benefits It’s sensible to avoid paying unnecessary tax and to make sure you receive the government benefits you’re entitled to. However, artificial tax and social security arrangements can prove expensive and risky
Topping up your super Putting more into super is often an excellent option, although you generally cannot get your money out of super until reach your ‘preservation’ age (55 year or older).Find out more by visiting the Super Choices website.
Meeting short and long term needs Good advice considers both your immediate and long-term needs. Generally, cash is fine for the short-term, but won’t build wealth. Shares and property are usually fine if you hold them for 5 years or more, but your could lose money if you give yourself only a year to two.
Spreading your risk Investing small amounts regularly can reduce the risk of investing everything just before the market drops. Spreading your money across different kinds of investments (for example, shares, property, and cash), and even different fund managers can reduce your risk of losing heavily on a single choice.
Switching out of one asset or product for another Getting rid of poorly performing products or assets can make sense, especially if performance has been poor for 5 years or more. Switching just to catch the latest wave can often be a mistake. It may involve extra fees. Ask your adviser to spell out the reasons in full
Borrowing to invest This is a riskier strategy to build wealth more quickly. Your advice should explain why this risk is necessary, and discuss alternatives. It should discuss risks like rising interest rates, losing your job or income, and how you pay back the loan. ‘Margin’ loans involve additional risks that should be explained

What products are recommended?

After you’ve grasped the general recommendations, take an overall look at the recommended financial products. These may include investments, retirement income products, super and insurance.

Many products could suit you, and even experts may not keep track of them all. Here are some things to consider about the more commonly recommended products.

In many cases, your adviser will receive a commission for selling you a financial product. They may also receive other side benefits. You have a right to know about these benefits because they could sway your adviser’s judgment.

Even if the product’s suitable, there may be other less expensive alternatives that are otherwise just as good or even better. If you’re going to be putting a lot of money into something, ask your adviser if you’ll be buying a more expensive product. If so, ask for written reasons why the more expensive product is better for you.

If you want to shop around, you can find independent information about financial products to help you compare them. Newspapers, personal finance magazines and websites often carry research reports about various super and managed funds. Consumer organisations, like Choice (also known as The Australian Consumers’ Association), also compare financial products.

Recommendations Things to consider
Superannuation Super’s and excellent way to invest for your retirement, but you generally can’t get the money until then.Compare retirement and insurance benefits, features and fees carefully, as funds can differ widely.Keep fees and charges down. If you pay an extra 1% in fees each year, you could lose up to 20% of your retirement benefit over 30 years: see ASIC’s super calculator. There may be lower cost funds that could suit you instead.

Switching funds can involve extra fees and affect any insurance cover you have through your super, so get your adviser to check this very carefully.

Insurance The right insurance can protect your or people who depend on you from serious financial risks such as your disability, illness or death.
Insurance Make sure you’ve told your adviser and insurer everything that might affect and insure’s decision to cover you. If you leave something out, the insurer may be entitled to reduce or refuse a claim or cancel your policy.
Investments outside super Investing in products outside super means you can get your money readily than if you put it in super, but you’ll miss out on tax concessions that apply to super and which would usually let you save more over the long term.Generally, the longer you hold the investments, the greater the impact of fees paid to your adviser, any master trust, and to your investment fund manager: see ASIC’s managed funds calculator. Make sure the benefits are worth the costs
Retirement income products Buying retirement products that keep your money inside super can save tax and give your access to government benefits.Keep enough money outside super for emergencies, because large withdrawals from retirement income products may be difficult or may complicate your tax or social security arrangements.Fees for these products will reduce your retirement funds so make sure you’ll be getting value for money, see ASIC’s allocated pension calculator.
Retirement income products Make sure your super fund has your tax file number. If you don’t then from 1 July 2007 you may face extra tax on your contributions for not providing it. You will also not be able to make personal after tax contributions to your super fund if you fund does not have TFN.Build up your contributions regularly, even by small amounts. This can make a big difference to what you retire on.Rushing to make large extra contributions just before you retire could cost you extra in tax.

You may be eligible for Government’s super contribution depending you you assessable income and fringe benefits.

Note: Military Super is an untaxed scheme. The tax treatment is different for untaxed funds under the new changes (1 July 2007). In this case, it depends on the age of the member as well as chosen type of payments (i.e. lumpsum or pension or both) an separation form the Defence Force.

More complex products Some products may offer special tax features, more unusual investments or extra personal control and flexibility (for example wrap accounts).Special features often cost more, so consider if you’ll really use them.

What’s it all going to cost?

Fees and charges can cost you more than you might first think, and can be complicated to work out. The cost of the advice and the cost of the financial products can often get blurred together.

Get your adviser to write down

  • the total costs in dollars for the advice AND the recommended products in year 1
  • an estimate of your total ongoing costs in year 2.

The fees your adviser receives will appear in your statement of advice. Usually you pay fees in two ways

  1. directly out of your own pocket, for example, to prepare a financial plan. This is generally a once-off fee.
  2. indirectly through commissions paid out of the money you invest or spend on financial products the adviser recommends. This may include both once-off and ongoing fees charged every year you hold the product. (Only a few advisers don’t charge this way.)

You can negotiate with your adviser on commissions, and it’s well worthwhile to do so.

You’ll also pay fees to the company that issues the financial products you buy. The fees for each product are set out in the product disclosure statement. Some advisory businesses may pay back or discount some fees, but will offer no advice when they do this.

An example of how fees work

Example: Alex’s costs in year 1
Total costs to Alex $5,500
What the adviser receives Alex pays the adviser $1,500 for the once-off fee to prepare a financial planThe fund manager pays the adviser $2,600 out of Alex’s account $4,100
What the fund manager gets paid The fund manager takes this out of Alex’s account $1,400
Example: Alex’s estimated costs each year from year 2
Total costs to Alex $2,400+
What the adviser receives The fund manager pays this to the adviser out of Alex’s account $1,100+
What the fund manager gets paid The fund manager takes this out of Alex’s account $1,400+

ASIC’s super and managed funds calculators help you to compare fees charges, based on your own circumstances.


Alex has inherited $100,000 and wants advice on how to look after it. The adviser recommends investing in a sharemarket fund, managed by the adviser’s parent company. Alex also gets some financial advice about topping up super and insurance. The adviser offers to monitor Alex’s investment and keep a general eye on things at an extra cost. Alex agrees to this.

This is going to cost Alex $5,500 in year 1, and around $2,400 each year from year 2 onwards. Alex needs to decide if the advice and the fund are worth the cost. This chart shows how the payments could get shared between the adviser and the fund manager1.


1Based on $100,000 invested with 2% contribution fee, 2% management costs (that includes a 0.6% trailing commission to the adviser), a 0.4% adviser service fee, and the fund earning 8% each year before fees Adviser and fund manager receipts are broad estimates only.


Investment risks and returns

Good advice explains the risks of any recommended financial products, such as possible loss of capital or lower earnings.

Different types of investments earn different rates of return, generally reflecting the level of risk. Properly managed, risks can increase returns. But if the risk is going to keep you awake at night, there’s no point getting involved.

This table shows a range of returns that you might reasonably expect from different investment strategies over the long term.

However, each year your fund may perform better or worse than these averages, as markets move up and down. Fees and taxes will also reduce these returns.

Take extreme care with high rates of return, say more than 1.5-2% per year above the average return for the type of asset in which you invest. If your adviser suggests you can expect high returns, get a written explanation with the risks fully explained. If it sounds too goods to be true, it’s probably best to say no.

Investment strategy What it usually means Expected return BEFORE you pay fees and taxes*
Growth Invests 70-80% in shares or property.Aims for higher returns over the long term and so risks higher losses in bad years. 8-9%
Balanced Invests 60-70% in shares or property, the rest in fixed interest and cash.Aims for reasonable returns, but less than growth funds in order to reduce risk of losses in bad years. 7.5-8.5%
Capital stable Invests 60-70% in fixed interest and cash, although some invested in shares or property.Aims to reduce risk of loss and therefore accepts a lower return over the long term. 5.5-6.5%
Cash Invests 100% in cash.Very low risk of losing your capital with a lower return over the long term than capital stable funds. 4.5-5.5%

ASIC obtained professional advice about these earnings rates from licensed independent actuaries. The actuaries consulted a variety of sources including assumptions used by industry groups, leading asset consultants and publicly available survey data about managed funds investment strategies. These rates are just reasonable long-term estimates, not guarantees.


Check the fine print

Make sure you’ve received a product disclosure statement or prospectus for each financial product. (You don’t get these documents for shares in a company already listed on the Australian Stock Exchange, but read a copy of the company’s latest annual report and check for recent company announcements through www.asx.com.au.)

These documents set out what you need to know to make an informed decision, including benefits, risks and fees.

Make sure you’re getting value for money. ASIC’s FIDO website has super and managed fund calculators to help you work this out.

Read the documents your adviser gives you. If you don’t understand something, ask your adviser to explain, or ask a solicitor or accountant. Always find out what the document really means before you sign. It’s your money. Your adviser gives you advice. You make the decisions. Good advisers want you to ask questions now, not become an unhappy customer later.

Negotiate costs

Some advisers may agree to reduce fees on various products, especially if you ask. Check if your costs include a review of your investments from time to time or if you must pay for that service separately.

Carrying out the advice

Cooling off

If you purchase managed funds, life insurance, super or general insurance, you generally get a 14 day ‘cooling off’ period when you can change your mind and get your money back. (There are some exceptions, including buying shares.)

Making payments

Make cheques or money orders payable only to the company named in the prospectus or product disclosure statement, adding the words ‘on account of [your name]’. This helps the company credit your account. Never make a cheque for an investment payable to your adviser. (Reputable advisers won’t ask you to do this.)

Keep control and keep your paperwork

Keep control over your money and investments. If you are sick or going away, it’s best to authorise an independent person, a solicitor or trustee to act for you and check what your adviser is doing. If you have particular reasons to give your adviser power to buy and sell investments on your behalf, avoid long term, open-ended arrangements.

Always get receipts. Keep all your paperwork about your advice and investments yourself so you can keep track of your money and check your regular statements for possible mistakes. If you do not get a receipt or statement from the company in which you invested your money within four to five weeks, contact them without delay.

Check how often you will get statements and reports about your investments. Usually you will receive information at least twice a year. If it’s late, contact the company direct, not your adviser.

Protect yourself from fraud

Fraud happens, although not very often. Act immediately if something does not add up or look right. Contact your adviser and if the matter is not sorted out quickly, make a formal complaint. If you suspect fraud or dishonesty, contact ASIC as well.

People sometimes open themselves up to fraud through illegal or secret investments that they’re trying to hide from the Tax Office for example. Contact ASIC if you are ever offered these ‘investments’.

Review your plans

Review your plan at least once a year to ensure the plan is still right for you. Keep an eye on your investments. Your circumstances may change and the market value of your investments will certainly change. If you have a long-term plan, don’t panic about small changes in the market. On the other hand, you should talk to your adviser if major changes occur.

Many advisers can review your plan and investments for you. Check how much it costs in dollars and what you get for your money. Dealing with complaintsBy law, all advisory businesses must tell you how they handle complaints. They must have a proper internal complaints process, and must also be a member of an independent scheme to which you can complain if you remain dissatisfied.

More help

Free financial tips and safety checks, including investment calculators, information about shares, managed funds and retirement income products, and for help on suspected inadequate, misleading or deceptive information or misconduct, fraud or dishonesty.Consumer website: www.fido.gov.au
Phone: 1300 300 630

Institute of Chartered Accountants in Australia

To find a Chartered Accountant who is licenced to offer financial advice, in addition to other usual chartered accounting services.

Website: www.charteredaccountants.com.au
Phone: 1300 137 322

CPA Australia

To find a Certified Practicing Accountant who is licenced to offer financial advice, in addition to other usual accounting services.

Website: www.cpaaustralia.com.au
Phone: 1300 73 73 73

Financial Planning Association of Australia

To find a financial adviser, check if your adviser is a member of the FPA, discuss your adviser’s conduct or quality of service or to get a free brochure on financial planning.

Website www.fpa.asn.au
Phone: 1800 626 393

Financial Industry Complaints Service

For complaints about financial advisers after you have tried to sort things out through a formal complaint to the business itself.

Phone: 1800 335 405

Centrelink

Free financial information and seminars, as well as help on government benefits.

Website: www.centrelink.gov.au
Phone: 13 23 00

Choice (also known as The Australian Consumers’ Association)

Free and some pay-to-view website information, Choice and Choice Money and Rights magazines by subscription and books for sale.

Website: www.choice.com.au
Phone: 02 9579 3399

Australian Stock Exchange Limited

To find a stockbroker, find out about ASX investment courses and seminars and ask about shares, listed securities and listed company announcements.

Website: www.asx.com.au
Phone: 1300 300 279

CHECK OUT OUR OTHER HELPFUL GUIDES

Saving

Whatever your circumstances, by working out your goals and starting a regular savings plan, you can begin to make your dreams become a reality.

READ MORE »

Making Your Money Work

Once you have been able to generate some savings, the next step is to get your money to work for you. This includes having clear goals, using money wisely, and managing your loans, insurance and retirement savings.

READ MORE »

Budgeting

How much money is coming in and going out each week, fortnight or month? By taking charge of your money, you will ease money stress and feel more secure and in control.

READ MORE »

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