Getting Financial Advice
4. 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.