Most people have heard of financial advisers and may even think they should have one, but they do not know how to find a financial adviser.
You should get financial advice, and get it before it is too late.
Too often people leave it to the last minute to see an adviser.
Decide What Sort Of Adviser Do You Need?
There are a lot of different people that offer financial advice and can therefore be called financial advisers.
Typically financial advice is sought for three distinct purposes;
- To provide advice on savings and investment
- To provide advice on debt (loans, home loans and business finance)
- To provide advice on financial risk
What sort of financial advice do you want?
We know that for some people there is specific advice that is required, while for others the advice might be more general advice.
Savings and Investment Advice
Most kiwis do not have large amounts of savings or investments and therefore just leave it to the bank to arrange their affairs using various savings accounts, term deposits, possibly some managed funds and their KiwiSaver. Unfortunately this means they get very little advice as for most customers the banks will not offer a financial adviser and instead just ‘sell’ the banks own products which may not be the most suitable or have the desired results.
Some people will get the services of an authorised financial adviser who may have access to a wide range of financial products and the skills and processes to implement a proper financial plan. This advice is definitely superior to what the banks will generally offer, but there is a cost which needs to be considered.
With the “do it yourself” attitude that kiwis are renown for sees a lot of people arranging their investments by themselves with possibly some research done online. This strategy can work but you need to be careful and keep up with current economic trends and products.
We are happy to discuss your savings and investment goals and while we do not specifically offer investment advice we can talk about the general concepts and put you in touch with the right people to help you whether you are wanting managed funds, term deposits, shares (equities), investment property or KiwiSaver.
Advice On Debt: Mortgages & Finance
Financial advisers who specialise in debt are typically known as finance or mortgage brokers or mortgage advisers.
When a young family buy their first home they generally will have a large debt and very little savings or investment. At these stages of life the most important financial adviser will be one that can show you how to best manage the home loan, can negotiate the best interest rates with the bank and can show you how to pay your mortgage off faster.
Of course the hope is that you will pay your home loan off and then may start to build up an investment portfolio in which case an investment adviser might be needed.
Getting Advice On Managing Your Risk
Most financial advisers that talk about “risk solutions” will make their money by selling insurance and the more that it costs you, typically the more they get paid. Insurance “salespeople” are one of the least trusted professions, but most people understand the need for insurance.
Of course there are some very good insurance advisers and we recommend the team at Risk Solutions who offer impartial advice with a focus on making sure you get the right outcomes if you ever find yourself needing to claim.
Independent Advice Or Impartial Advice
In New Zealand’s regulatory environment you will rarely see anyone calling themselves an independent adviser as they would have to (1) be able to offer a wide range of products and (2) not be paid commission.
Many advisers are employed by the companies that offer financial products (banks, investment providers or insurance companies) or by a company that is owned by one of those companies.
It’s important to have choice.
A good financial adviser will want to be able to keep you as a client for many years and as things change over time they should be impartial and want to be able to offer you choice.
Do You Understand The Advice?
Too many financial advisers try to dazzle you with their “perceived” skill but a good financial adviser will be able to explain things to you in a down to earth and plain English way so you can understand what they are doing for you.
Stuart Wills is one adviser who is known for his down to earth approach and the way he can explain things so that ‘almost’ everyone can understand things. He says he has been at industry presentations where half the advisers appear not to understand what they are being presented. It is no wonder then that they struggle to provide the right advice or be able to explain the products.
Do not be afraid to ask …
How To Find A Financial Adviser
There is no easy way to know how to find a good financial advisor, but you need to trust them so you can feel confident that they will look after you well.
Word of mouth is a good way to find a good financial advisor, but everyone is different and sometimes one person will have a great experience with an adviser but another person might not get on so well with that same adviser.
We believe the key to having a good working relationship with a financial adviser is the same as any relationship – that is making sure that the adviser listens and has a good understanding of what you want, and you have the ability to listen and adopt their advice too. It doesn’t mean that you shouldn’t question their advice if you are not convinced it is right for you as it is your money that they are dealing with and while an adviser’s job is to provide advice, they need to also make sure that the advice suits the situation.
It is always best to speak to an adviser early when you have the time to make good decisions.
I think we have all been in the situation where we knew we needed to go to the toilet but were busy and so waited until the very last minute – only to get to the toilet to find it is busy.
It’s not the most comfortable position to be in!
Getting financial advice is a bit the same – you know you should get some advice but you are busy so you leave it until you absolutely have to get the advice and then it is easy to feel pressured.
It is always better to get advice early so you can make decisions in your own time.
Find A Mortgage Adviser
There are a lot of mortgage brokers who might be able to source you finance, but a good mortgage adviser will ensure that the finance sourced is appropriate and then show you how to pay off the debt faster.
At North West Mortgages we pride ourselves on offering good advice on finance and mortgages which we specialise in, but we can also help with savings and investment advice plus risk management and put you in touch with the right people.
