One of the barriers to people working with a financial adviser is knowing who to talk to. The relationship between an adviser and a client is founded on trust and it takes time to develop. There is an element of risk in putting your trust in someone when you don’t them that well, but there are some signals that can indicate whether you are talking to the right person.
To begin with, it is really important that you like the person who is giving you advice. They should be approachable, open, accessible and easy to talk to. It’s important that an adviser communicates with you in a way that you understand, without using jargon or technical terms that are incomprehensible. All advisers are required to give you a disclosure document, and this sets out important information which allows you to compare one adviser with another. In particular, it tells you whether the adviser provides advice on products from just one organisation or a number of organisations.
Good investment advice starts with understanding your financial goals, your investment time frame, and your attitude towards investment risk. An important role for an adviser is to ensure you fully understand investment risk, as there are many aspects of risk, and how to manage the level of investment risk while still being able to make a decent return. Investment markets go through cycles and a good adviser will be able to explain in simple terms how the cycles are affecting your portfolio and what action, if any, you should take to stay on track for achieving your goals. Some advisers would say the best way in which they add value for clients is to dissuade them from panicking when markets fall. Now is a good time to be looking for good investment advice.
Liz Koh is an Authorised Financial Adviser. The advice given here is general and does not constitute specific advice to any person. A disclosure statement can be obtained free of charge by calling 0800 273 847. For free eBooks, go to www.moneymax.co.nz and www.moneymaxcoach.com