The financial services sector has been under scrutiny for some time now, due to the findings of the Royal Commission into the misconduct in the banking, superannuation and financial services industry. Here's our top tips on what you should look for in an advisor to minimise your risk of having a bad experience.
The financial services sector has been dragged through the mud in recent months, due largely to the explosive findings of the Royal Commission
into misconduct in the banking, superannuation and financial services industry. Even financial advisers have not been exempt from scrutiny, leaving many to question whether there is any positive light at the end of the tunnel, and putting the public’s faith in advisors under question. 9% of submissions received by the Royal Commission is on the topic of financial advice, which although is a low percentage, it still highlights that there has been misconduct from some financial planners.
To minimise the risk of having a bad experience with an advisor, we’ve put together a few points you should consider when selecting a good advisor.
Top three things you should look for in a financial planner:
1. Education – look beyond the minimum requirements
The current minimum education standard of becoming a financial advisor is low. There is no requirement of a university degree to provide advice to clients. All that is required is a diploma of financial planning; a short four-unit course. There are talks in the industry of raising the minimum educational requirement to a bachelor’s degree in a finance related discipline such as finance or accounting, since higher education standards should lead to more ethical behaviour.
Look for an adviser who has gone above the current minimum requirements. An advisor who has studied related disciplines holds the advantage over other advisers of having broader knowledge to apply to the advice they give you. It’s also a great way to future proof your adviser relationship – if they don’t meet minimum requirements now, they will no longer be able to practice as a financial advisor once the new standards come into play.
2. Membership of professional associations
Is your financial planner a member of a professional association, such as The Financial Planning Association
, Chartered Accountants Australia & New Zealand
or Certified Practicing Accountant?
Being part of associations shows professionalism, as members will be adhering to the codes of ethics of these associations. Their standards often sit higher than the minimum standards required, which provides peace of mind that your advisor is performing ethically and unlikely to show misconduct. Advisors who are part of an association have access to professional development, ensuring your financial planner is always up to date with changes and current regulations.
3. Look for a non-aligned licensee
To ensure your financial planner acts in only your best interest, and not the interest of a specific provider, make sure the licensee is not aligned with a product manufacturer. Your financial planner should choose a product that best suits your needs, with no obligation to select from a restricted panel.
At Carbon, our team of Carbonites
are selected on their skill set, experience, and drive to service clients beyond expectations. We’re proud to have a team of financial planners
who sit higher than industry standards in both their education and client service. Contact us to see how they can help provide you with a more secure financial future.
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