What to look for in a financial planner

Today there are many financial planning advisors that you can seek advice from. In the main, we regard them as professional colleagues who have their own individual skill sets.

Ensure your advisor is not just qualified, but highly qualified

Finance is a complicated field. It should be automatic that any financial professional holds at least a degree in a finance related field.

• Ask if your advisor has a degree in a finance related topic. If not, ask why not? You want an advisor who has a deep knowledge of finance.
• Ask if your advisor has a professional financial qualification. If not, again ask why not?.
• Ask when your advisor last undertook financial study. You want an adviser who is up-to-date on the latest industry trends.
• Ask what the last finance related book your advisor last read. You want an adviser who is passionate about finance and learning.

Ensure your advisor is not just experienced, but highly experienced

• Ask your advisor how long they have been operating in the finance field
• Ask your advisor how long they have been advising clients
• Ask your advisor whether they will be working personally on your financial strategy or if they will be simply delegating it to a junior para-planner.
• Ask your advisor whether they will construct your financial strategy or if they will be relying on software packages to construct it.
• Ask your advisor if they do their own research or do they just rely on research acquired from someone else. You want an advisor who can add value, not simply a salesman.

Ensure your advisor is interested in educating you

• In Quantum's experience, informed, educated clients make better clients.
• This is because they fully understand the investment process and what is required of them and of their advisor.
• Financially educated clients are more aware of potential investment opportunities and of the many investment pitfalls that exist.
• Quantum has a policy of actively seeking to educate clients over time as our relationship develops (if the client is willing and has the time and patience).

Ensure your advisor will still be there for you in 5, 10 years

• If your advisor is an employee of a large firm working in a branch, what assurance can they give you that they will not be promoted and moved to another office in another area in the future.
• If your potential advisor is elderly they will obviously have experience but ensure you ask them when they are intending to retire. You do not want to have to develop a new relationship with another new advisor in 5 years time.
• Ask if your advisor has an equity stake in their business - if this is the case they will be more likely to still be there as your advisor in your area in 5, 10 or 15 years time.

Seek a financial planning expert

(Disclaimer: This writer is a Chartered Accountant) Despite the fact that I am a qualified Chartered Accountant, this writer  deliberately does not offer Chartered Accounting services but rather chooses to focus on financial planning services. Why? Because, in my opinion, both areas are incredibly complex, very different and constantly changing  and both deserve 100% of a professional's focus and attention. If I were to provide both services, in my opinion I would not be able to provide my clients with a superior service in both.

Understand your advisor may have conflicts of interest

• Your advisor may have a vested interest in encouraging you to invest in their own products
• For example, according to ASIC: "“...93% of all new investment or superannuation business resulting from the advice of AMPFP Planners was invested in AMP platforms or products. This is not atypical of dealers."
• Quantum is independently owned - we do not face this conflict of interest.

Be wary...

• of any financial planner that denigrates his/her fellow professional financial planning colleagues.
• of any financial planner that tries to 'sell' you his/her own company's products (eg managed funds, insurance products).
• of any financial planner that lacks formal qualifications or experience.
• of any financial planner that aggressively pressures you into investments.