Financial advisors are experts in guiding their clients on how they should work on their money and finances, the idea of which is to fit goals and needs. Wherever you are in Australia, you need the services of a financial advisor SA when it comes to making investments, planning retirement, insurance, entering mortgages, college savings, paying taxes, estate planning, and others. There also are times when the same individual moonlights as a lawyer, accountant, or insurance agent.
Since there can be several different types of a financial advisor (depending on the aspect of finances they help you with), it is your job as a potential client to figure out what you want from them. In return, they will tell you how they want to proceed with payment. For the most part, financial planning advisors prefer a flat fee for their services. On the other hand, some of them earn a living through commissions from the products they sell to clients like you. Furthermore, there also are advisors who both charge a flat fee and earn commissions at the same time.
Nevertheless, if it is your first time hiring and working with a financial advisor SA, it is better that you stick to a fee-only agreement for the moment.
There are a handful of jobs and responsibilities attached to financial advisors. But the thing is those responsibilities may not be the same from one country to another. Although, they perform the following on behalf of their clients:
1 – Provide reasonable and practical investment recommendations which are free from external influences.
2 – Pick broker-dealers in their client’s behalf, and that is made possible by their ability and skills in the execution of trades for accounts where the financial advisor gets the authority.
3 – Make recommendations based on the investment objectives disclosed by clients, relevant to the economic situation.
4 – Put the interest of the client as the top priority.
The ways of compensating a financial advisor vary from one location to another. In fact, other countries might pay them differently the way they get paid in Australia. Generally, you expect to pay them based on a percentage of total assets under advisory. On the other hand, there are times when the financial advisor gets paid through commissions from insurance or financial products they promote and sell. However, there is a possibility of a conflict of interest since the financial advisor would instead choose his or her financial product to recommend to his or her client, even though it is not the best option available. It is why the number of financial advisors selling financial products is gradually dwindling these days.
When you are out there looking to hire a financial advisor, it is best to start by asking friends, neighbours, family, or even co-workers for referrals since they wouldn’t give you a name or two if they did not have a positive experience with that prospect.