The top eight questions your financial planner does not want you to know

Finding a skilled financial advisor can be like trying to buy a car. If you choose the wrong one you might be stuck with a lemon that costs you a lot of money.

So how do you choose your financial planner? Roll a dice, flip a coin or blindly choose. In this article we show you how to identify the good financial planners from the bad and we give you some critical questions you should ask your financial advisor. In a continuing relationship, where financial advisers work with you year-in and year-out, they tend to be more oriented toward giving service. They’re in a position where they should be more accountable for the long-term consequences of their financial advice. But this is not something you and I have the luxury of having when we first choose from the independent advice we receive from our financial planner. So it is critical we ask the following questions:

What are your potential areas for conflicts of interest?

Advisors who say they don’t have any aren’t being candid. It’s impossible to eliminate all conflicts of interest. But it’s important to know what they are and how deep they run so you can evaluate all advisor recommendations with this information in mind.
They need to act in your best interests. For instance if they are a bank finance adviser are they required to only offer one product? A good answer would acknowledge factors that lead to conflicts and should make you feel comfortable with the advisor’s process. This process should include full disclosure of potential conflicts involved in each recommendation and addressing all of your concerns as you go along.

What products are you best suited advise on? What about the products I currently have?

This links up to the above question. Your financial planner needs to have a varied range of products from numerous providers, so that the advice you get is not limited. It’s important for you to work out if the adviser’s recommendations are restricted to a certain type of product or limited to products from a small number of providers. This is why
with a Arishine Financial Planner we suggest you meet with more than one financial planner to be able to compare the advice you are likely to receive. Be clear as to whether you want broader financial advice or advice about an existing product. For example, can they provide advice in relation to your current super fund or managed fund even if it is not on their approved product list?

How are you compensated, directly and indirectly? How much is your advice likely to cost?

What is included in the fee and if there will be any additional costs for preparing a statement of advice (SOA), implementing the advice, or revisiting the advice in future years if your circumstances change.

They have to disclose their fees in their Fee Disclosure Statement, Financial Services Guide and Product Disclosure Statements.

Fee-only advisors are generally paid only for their advice to clients — typically as a percentage of total assets under their management or a fee regardless of performance. Some may also earn fees from commissions for the sale of products, like insurance. It’s important you clarify what kind of financial advisor they are.

What level of study and evaluation do you do on recommendations?

The more effort advisors put into this their recommendations, such as gathering multiple data points supporting their recommendations, the more likely it is that they have good reasons – in your interest – to make these recommendations.

One of the best reasons to ask these questions is to see how the advisor reacts. If you’re shopping for an advisor and they take offense at your inquiries, keep looking. If the advisor is already working for you and is taken aback, you probably should reevaluate the relationship.

What are most of your clients trying to achieve?

You want to know your advisor is dealing with people with concerns and goals like yours, for example retirement planning or young families wanting to save for their children’s education.

How do you get to know a new client?

This links up to making sure you’re dealing with a financial planner who is best suited to recommend you on a product that suits you. They need to ask a full range of questions get a full picture of your circumstances and needs. By asking questions about your current situation as well as your financial goals, both long term and short term they can make proper recommendations. They can help you prioritise your financial goals, explaining and discussing choices with you and developing a strategy to achieve your goals. They should help you refine your goals if they are not realistic and achievable.

Is there ongoing fees and charges? What will I get for this fee?

Most financial advisers who charge some on going fee should offer you
regular reviews of your circumstances and investment portfolio, make sure all the investments and insurances are still relevant if necessary. If you are paying ongoing fees you should expect to have reasonable access to your adviser when you need questions answered or want to discuss a financial issue with them like making a claim on one of your life insurance products.

How do you keep up to date with changes that may effect me?

Your financial advisor should attend courses or seminars run by universities or registered training organisations. They are required to keep themselves educated and have a certain minimum amount of Continuing Professional Development (CPD) points each year. They could also me a member of member of an industry organisation such as the Financial Planning Association of Australia (FPA), the Association of Financial Advisers (AFA), Certified Practising Accountants (CPA), the Institute of Chartered Accountants Australia (ICAA), the Financial Services Institute of Australasia (FINSIA) or the Stockbrokers Association of Australia. It’s important to ask which one(s) they are part of.


There is no fool proof system to get the right advice however with hundreds of financial planners at your disposal you can’t go wrong with Arishine financial. Fill in our two minute form and get a quote now. You’ll be glad you did.