One of the challenges with financial advice and financial services more generally is it’s often hard to gauge what you are signing up for. Unlike buying a house, a car or going to a restaurant, financial advice is more a leap of faith and this is your hard earned money we are talking about. Furthermore, it could be quite some time before you know for sure if the advice you are getting is hitting the mark.
As when buying anything significant, you can and should do your own due diligence before getting financial advice. For example, research the history of the financial adviser and how they operate their business. Review their experience and qualifications, take a look at their website and do some reference checks. Unfortunately, the intangible nature of financial services puts clients at a real disadvantage as they often have to rely on and take at face value the information provided to them by the financial adviser. That sounds rather daunting doesn’t it and it’s why transparency is so important when it comes to financial advice.
To some extent regulations help as financial advisers are obliged to disclose prescribed information to prospective clients. In the case of Authorised Financial Advisers, they must provide a Primary Disclosure Statement before providing you with any financial advice, followed soon after by their Secondary Disclosure. Once you become a client, the information you get from your Authorised Financial Adviser is less prescribed and more principles based.
At Saturn Advice, we believe transparency is crucial, not only when you initially engage a financial adviser but on an ongoing basis. Here are five pointers to good transparency: