How to Know if Your Financial Adviser is the Right Fit for You?
The financial adviser and client experience can vary.
From my time in the industry I’d say overall it’s positive.
Of course I’m biased because I’ve worked in financial advice for years and believe in the value it brings but I also know it doesn’t always work.
So let’s look at the situations where the relationship can fall apart. In my experience there are three broad categories.
When it’s the adviser’s fault.
When it’s the client’s fault.
And when it’s just a poor match on both sides.
When it’s the Adviser’s Fault
Financial advisers don’t all offer the same thing and the truth is not everyone meets the standard of delivering great advice.
I’ve met advisers who could write technically sound advice but couldn’t explain it in a way that connected with people.
Others were great communicators but didn’t have the depth of technical knowledge.
A great adviser needs both.
There are also unethical advisers. Thankfully the banking royal commission and tougher education standards have lifted the bar and shifted financial advice more toward being a profession than a sales channel.
But even good advisers can be caught in bad businesses.
You can be skilled at giving advice but if the business model is weak compromises get made. That might mean slower communication or a drop in service. And if you’re only looking for the cheapest possible option expect there will be trade-offs.
Good advisers and good firms charge in a way that allows them to give each client the service and care they deserve.
When it’s the Client’s Fault
This usually comes down to two things: expectations and fees.
Most Australians underestimate the cost of providing financial advice.
Much of that cost comes from regulation and compliance which protects consumers but also adds time and expense. Compared to countries like the US our advice system is more professional but also more heavily regulated.
This can put people off seeking advice in the first place.
But here’s the important part. Advisers are bound by a legally enforceable Code of Ethics and can only provide services if they believe it’s in your best interest. Gone are the days when banks sold products disguised as advice.
The focus should be on value rather than cost.
Think about it like going to the doctor. You don’t just want a prescription you want a diagnosis first. The same is true with financial advice. It starts with understanding your situation and then creating solutions that fit.
Value can mean tax savings worth tens or even hundreds of thousands but often it’s the peace of mind clarity and security that really make the difference.
If you only ever focus on cost you’ll likely end up at the low-value end. And again it’s the adviser’s job to show you the value in what they do.
Another point is the type of adviser you choose.
Just like medicine you have generalists and specialists. Some advisers mainly focus on products like insurance or super. Others like myself take a broader approach that starts with your goals values and cash flow before moving into investment and strategy.
If you’re someone who likes to manage everything yourself and just needs a one-off insurance policy or super review then a product-focused adviser might suit you better.
But for many people the real value comes from an ongoing relationship with someone who understands them and helps track their progress over time.
When it’s Mutual
Sometimes it’s simply not a good fit.
You might have been referred by your parents to their adviser who specialises in retirees.
If you’re in your 30s or 40s you’re probably not their ideal client and they may not be the right adviser for you. Their expertise is in retirement planning while you might need help building wealth managing cash flow or balancing family life with financial goals.
Location can also be a factor. Years ago people were limited to whoever was nearby. I grew up in a small town and saw how this narrowed choices.
These days you can and should seek out advisers who work with people like you. If you’re a high-income professional find someone experienced with others in similar situations.
My general advice is to meet with a few advisers and get a feel for them. Ask questions and think about whether they’re someone you’d be comfortable picking up the phone to call or whether the experience feels more like going to the dentist.
There are plenty of great advisers out there and if you’re even reading this then chances are you’ve thought about getting help.
The biggest risk I’ve seen for people in their 30s and 40s is doing nothing.
Waiting until later in life usually means you’re forced into making decisions under pressure and that’s rarely enjoyable. An adviser can help guide you on whether now is the right time and if not when it might be.
At the end of the day the right adviser is one who makes you feel confident supported and clear on your path forward.
Want to know more?
1) You can click here to book a free 15-minute free clarity call with Sam Woodhouse to discuss how this may relate to you.
2) Join our Your Money Simplified email list to start taking control of your money today. And when you subscribe, I'll give you a PDF called My 3-Step Process for Building Your Road Map to Financial Freedom.
The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional. We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.