A Financial Adviser’s Worth: When and How to Work With One

Chances are at some stage in your life, you’ve thought about being better or doing more with your money. Perhaps the following thought was something along the lines of “now where the heck do I start?”. Great question. You have a few options… But generally speaking, the most direct and useful pathway is to seek some financial advice.

Here are the in’s and out’s of financial advice: when you might need it and most importantly, where you might get it.

A pretty broad term is what it is! We’ve found that financial advice has historically been hard to define in the eyes of the everyday Kiwi. It has been made to sound like a complex procedure that only the wealthy should bother with. This has, in turn, made it frightening and difficult for a lot of Kiwis to really understand.

So, here’s the 101.

Simply put, everyone has a place in their lives for financial advice. Whether you’re looking for direction, putting your first budget in place, wanting to pay down your debts more effectively, buying your 1st/2nd/3rd/4th property, trying to decipher insurance policies or looking to put money into the ever-fluid world of the stock market. Consider getting financial advice if you’re thinking about, or planning for, future you.

Although you probably have a few friends or relatives who are certain they have the inside scoop on the next “sure bet”, when it comes to making big financial decisions and life plans, it’s best to seek a professional who is qualified and regulated.

If you’re unsure of what you need, what’s best for you or how to protect yourself financially, a financial adviser can help you answer these questions. They’ll support in defining what it is you’re trying to achieve, establish options to achieve it and most importantly, help you move forward with a strategy to apply to your financial decisions, rather than shooting from the hip.

There are a few types of financial advisers in New Zealand, so it pays (yes, that was a pun) to understand which type will best align with what you are wanting to achieve.

The first thing to establish is what type of service you are looking for. Some advisers will work with you on things like your personal insurances and your mortgage. Others will be able to help establish investment options, if for example, you are looking to invest your savings. Other advisers will help you set a budget and some will do all of the above.

Make sure you understand what it is you’re looking for and to ask the adviser whether they can help you with specifically that.

Secondly, understand who your adviser works for. Some advisers work for a single provider (i.e. a KiwiSaver provider or a bank) and others work completely independently. What we mean by that is, an independent adviser can work with multiple providers in the market and bring you the best options for your position and goals. Typically this flexibility is not afforded to an adviser working under a specific provider.

Having an independent adviser is immensely valuable when making financial decisions because the advice you get should be completely unbiased.

There are a lot of great financial advisers in New Zealand, but not all of them will suit you. When you’re looking for one, try to remember that the best advisers will;

• Do what’s right for you, not them.

• Advise you, not sell to you.

• Always be upfront about how exactly they get paid.

Seeking financial advice is something that many people do when they are entering a new phase of their lives. For example, purchasing a home, starting a family or planning for retirement.

The reality is, there is no ‘right’ or ‘wrong’ time to seek financial advice. Having an adviser on your team is no longer just for the ‘wealthy’ either. You no longer need to have $500,000 sitting in the bank to get good, pragmatic advice from a professional.

The thought of wanting to speak to someone about how to be better with your money is a positive step forward, and a good adviser will help you harness your motivation and turn it into progress.

If you are interested in speaking to a financial adviser – go for it!

Do you have a friend who had a good experience with a financial adviser? That’s always a good place to start! Otherwise, like anything, it’s beneficial to do your research.

Shop around, check the Google reviews, check their website and do your due diligence. You won’t regret the extra time spent to make sure you find the right fit. You can also scope out a few advisers and then decide who’s best for you. We always suggest going through an initial meeting (most advisers will do this free of charge) to ensure a few things;

1. Your situation is clearly understood.

2. The right type of financial advice can be provided.

3. Your personal values align with who you are working with.

Anyone providing financial advice professionally needs to be licensed by the Financial Markets Authority (FMA). All financial advisers must either hold a license themselves or work for someone else with a license.

Financial advisers are all paid in different ways. A lot of financial advisers will be paid by a product providing company (like an insurance company or KiwiSaver provider) to advise on their products. It can make the interaction a little less confronting, knowing you likely won’t need to fork out any of your own cash. Financial advisers are legally required to tell you about any commissions or bonuses they get, but always feel free to ask!

Other advisers may charge you directly via a flat fee, an hourly fee or an on-going percentage fee on the funds you have under management, otherwise known as a “fee for service”. Often this comes when the adviser is spending more time on services they won’t be paid for by a provider, such as investment planning or money management planning (i.e budgeting). Always ask how the relationship will work because they are obliged to tell you!

Just because you’ve engaged a financial adviser, doesn’t mean you’re stuck with them! At the end of the day, we are people – and people don’t always gel with… well, people!

It’s important that you’re comfortable with your adviser, because without your full engagement, it is likely you won’t get the best results. If you think it’s time for a change, don’t be shy.

It is common for people to struggle to ‘break up’ with their financial advisers because they have shared so many of their personal details with them. They have exposed the ‘nitty gritty’ of their financial lives and maybe even shared a few drinks at the local pub. However, it’s important to remember that your adviser is (or should be) a professional. A short, well worded email is all it requires – and your adviser should be ok with that. If they aren’t, then you definitely know you are making the right decision.

Here’s to progress!

We sat down with Kalé Emery, Director & Financial Adviser at The Money Men to run through commonly asked questions we hear from those looking to engage (or break up with!) a financial adviser. Here’s what he had to say: