1. How do you charge for your services and how much?
"It's important to understand how advis ers get paid and what it is going to cost you in full," says Marah Curtin, head of client engagement at Davy.
“A fee-based model is more closely aligned with the investor’s best interest as the better the investments perform, the more the adviser is paid, and vice versa. Some advisers are less transparent than others and will only quote you the annual management charge (AMC) which doesn’t include third-party fees and other administrative costs. You want to know the total expense ratio (TER) as well as whether there are any additional firm charges, account set-up or transfer fees.”
Know exactly what you are being charged for. “It’s not about getting the lowest fee, it’s about ensuring that you are getting the service you deserve for what you are paying,” says Dan Moroney of Investec.
2. What are your professional qualifications?
A qualified financial adviser (QFA) is a qualification that typically takes six months to achieve and enables the holder to provide competent advice in relation to life assurance, pensions, savings, investments and loans.
Certified financial planner (CFP) status entails two years of coursework covering a much broader range of financial planning needs, culminating in a comprehensive board exam.
Chartered financial analyst (CFA) typically takes four years to achieve and covers in depth topics relating to investment management and financial analysis. It is more commonly found among advisers whose work is primarily focused on the actual management of your investments.
“Both the CFP and CFA designations are globally recognised. And all of these qualifications require continuing education, so you can take comfort knowing that the adviser is maintaining a certain level of competence,” says Marah Curtin.
3. What services do you or your firm provide?
The aim is to find a firm that provides comprehensive wealth management services and that takes a holistic view of your financial picture, taking into account all your financial assets and liabilities, says Curtin. Where possible, aim for a one-stop shop.
“Working with multiple providers can not only be costly, it can be risky. Diversifying across firms makes it increasingly difficult to manage your investments effectively. Doing so generally leads to stand-alone pools of money working independently of each other – from a risk perspective, this can be especially worrying as none of your advisers has a clear view of your total financial picture,” says Curtin.
“More importantly, when stuff happens, and you need to make important decisions quickly, you are much better served working with a single adviser who is well versed in your total financial picture, needs and goals.”
4. What types of clients do you specialise in?
Ultimately, you want to work with an adviser who has experience working with people like you. For example, if you are a business owner, you will want one who is familiar with the planning needs of a business owner.
Ask for a recommendation from a friend or family member who is similar to you in terms of life stage, profession, needs or goals. And do your due diligence online – looking them up on LinkedIn and familiarising yourself with their firm to be sure that what you see resonates with you. If it does, call and ask for a meeting.
“It all starts with a conversation,” Curtin says. “In that first meeting, the adviser will explain their process and how they work with their clients and a good adviser will then spend most of the meeting asking you questions and learning as much as possible about you to determine where and how they can add value.
“At the end of the meeting, you can decide together whether it is a good fit and if it makes sense to take the next step together.”
