What you should look for in a good financial planner
"Can you recommend a good financial planner?" is one of the most common questions asked by Money Magazine readers.
Financial planners have had a couple of years of bad press about high costs and dodgy advice.
Not surprisingly around 27% of Australians say they don't trust financial planners, according to a survey by Investment Trends.
But the catch is that Australians need help about a range of financial matters.
A recent survey of self-managed superannuation funds by Investment Trends for Vanguard found that the most pressing advice needs are inheritance and estate planning, pension strategies, age pension and social security entitlements, offshore investing, strategies to avoid running out of money in old age, transition to retirement strategies, identifying undervalued assets and the list goes on.
One stumbling block for Australians when it comes to financial planners is the belief that they are only for the wealthy.
But Mark Rantall, CEO of the Financial Planning Association (FPA), says planners welcome people regardless of how much money they have.
Investment Trends found that some 8.5 million Australians need advice or 47% of the population, way below the 2.5 million Australians who used a financial planner in 2014.
Of those needing advice around two million Australians want advice about investing for a regular income and another two million are after retirement advice, according to research by Investment Trends.
With 5,500 certified financial planners around Australian, there are plenty to choose from but you need to pick one that suits your needs.
The FPA recommends looking for these attributes when searching for a good planner.
Top tips for choosing a financial planner
1. Licensed planners hold an Australian Financial Services (AFS) Licence issued by the regulator, the Australian Securities and Investments Commission (ASIC). Ask for a copy of their Financial Services Guide too.
2. Membership of the Financial Planning Association (FPA).
3. A Certified Financial Planner (CFP) qualification which is the highest qualification in financial planning.
4. Do you trust and have a rapport with your planner at your first meeting?
5. Is the advice concise and easy to understand? It shouldn't be complicated or difficult to grasp.
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