Many Australians turn to a financial advisor for help with superannuation, investments, or planning for retirement. Choosing the right person matters, but it’s easy to make decisions based on convenience or assumptions instead of facts.
Assuming Everyone Offers the Same Service
Not all financial advisors provide the same type of advice. Some focus only on specific areas like insurance or retirement planning, while others offer broader financial plans. Choosing without checking their specialisation can lead to gaps in the advice you receive.
Not Understanding How They Get Paid
Fee structures vary. Some advisors charge hourly or flat fees, others receive commissions from financial products. If you don’t ask how they’re paid, it can be hard to tell if their recommendations are based on what’s best for you or what earns them the most money.
Skipping the Background Check
In Australia, all financial advisors must meet legal and professional standards. It’s easy to look up their registration and qualifications on the ASIC Financial Advisers Register. Skipping this step could mean trusting someone without the proper training or licensing.
Basing the Decision on Personality
It’s common to go with someone who seems friendly or easy to talk to, but that doesn’t guarantee the quality of their work. A good rapport helps, but it should never be the main reason for making your decision.
Forgetting to Ask About Ongoing Support
Financial advice isn’t something you need only once. Plans should be updated as laws change or personal goals shift. Make sure the advisor offers regular reviews and is available to adjust your strategy when needed.
Not Being Clear About Your Goals
Advisors can only provide useful guidance if they understand what you’re trying to achieve. If you’re not clear about your goals, the advice you get might be too general to be helpful. Having even a rough idea helps the process go more smoothly.
Failing to Read the Paperwork
Financial services come with documents outlining fees, services, and legal disclaimers. These aren’t just formalities. It’s important to read them so you know exactly what you’re agreeing to. Skimming through can lead to surprises later on.
Relying Too Much on Reviews
Online reviews and ratings can offer clues, but they’re not always accurate or balanced. Some advisors may have no online presence but still do excellent work. Others might have great marketing but lack depth in service.
Choosing Someone Without a Backup Plan
It’s worth asking what happens if your advisor takes extended leave or leaves the industry. Having access to a broader firm or a clear succession plan means your finances stay managed without interruption. Many people forget to ask this until it’s too late.