Getting Financial Advice
1. 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:
|
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.