Circulus is partnered with a number of trusted advisors however the following excerpt is from the Financial Markets Authority of New Zealand – All advisers have a legal responsibility to act with care, diligence and skill and not act in a way that is misleading, deceptive or confusing.
Here are the questions you need to ask before you choose your advisor:
What type of advice do you need?
Can your adviser only give general advice or will it take into account your particular financial situation and goals? Can they recommend any products on the market or only the ones their organisation sells?
A bigger range of products means more choice for you. If your adviser only offers a limited range, ask them why. Find out if they can still offer advice on products you currently have.
What are your advisor’s qualifications?
Many authorised financial advisers (AFAs) have the National Certificate in Financial Services (Financial Advice). This is now known as the New Zealand Certificate in Financial Services. They’re also required to undertake continuous development to maintain their professional competence, and to gain new knowledge and skills.
AFAs who do not have their certificate must have an alternative qualification, such as a graduate diploma in business studies (endorsed in financial planning). Registered financial advisers (RFAs), such as insurance and mortgage advisers, don’t have to have a formal qualification. You can ask them whether they have any relevant qualification, for example, the Chartered Life Underwriter (CLU) designation.
Do they belong to a professional body?
AFAs are regulated by us. They must abide by a code of professional conduct which sets out minimum levels of competence, knowledge and skills, ethical behaviour and client care. It also outlines what continuous training is required. QFE Advisers don’t have to follow the Code but the organisations they work for have systems and procedures in place to ensure they closely follow a set of professional standards. We oversee how QFEs manage their advisers.
Registered Financial Advisers (RFAs) are not required to follow the Code of Professional Conduct but they may belong to a professional association that has its own mandatory code of conduct.
How experienced is your adviser?
Find out if your adviser has experience helping other individuals with similar goals to you. For example, are the adviser’s other clients planning for retirement or are they young families wanting to save for their children’s education? You can ask to see examples of their portfolio reports to see how they have helped someone in a similar situation.
How will you receive information?
If your adviser is providing ongoing advice, you should receive regular reports and have regular reviews. Ask your adviser how often these will be and what other information you’ll receive. It’s important to have this information so you can track your investments.
What will you pay?
Ask if there will be any ongoing trail commission or charges for closing your investment portfolio, or penalties you’ll pay if you stop using your adviser’s services.
