The 3 Questions To Ask To Separate Product Advice From Quality Advice
Faced with uncertainty when seeking financial advice?
As things shift in the financial advice and planning world it is critical that you understand how to ascertain the right kind of advice for you, your family, your business.
Here’s 3 questions to ask to seperate product advice from quality advice.
Question 1: Is the advisory relationship focused on you or on your money?
Separating product advice from quality financial advice has a lot to do with what is the centre of the client/advisory team relationship. Do you as a client feel like you are the centre of that relationship – or do you get the feeling that your money is at the centre of that relationship?
“A lot of firms are starting to ask goals-questions, but only as props to provide product or specific service advice” says Annette. “Ask yourself: ‘Are they saying things and advising me in a way that fits with my life, my outlook, my philosophy and my issues that makes me feel like I really am the centre of the relationship?’ Or is the advisory approach more focused on investment returns, tax savings, or opportunities to get bargains? While important, these aren’t at the centre of a ‘best interests’ advice approach.”
Question 2: Will your advisory team methodically revisit your value conversations?
“If your advisory team doesn’t re-examine what’s meaningful for all parties and what the blockages or issues are for all parties, then it’s a fair bet they’re going to assume what you thought last year was right. Realistically, things change,” says David Emby. “Technically no adviser would use last year’s figures and bank statements when revisiting a client’s plan. So how can they assume last year’s discussions about what was of value not need re-examination?
“Of course, a check-in to see what your adviser has achieved or reminder of where you’re going provides an enormous sense of confidence,” he says. “In our position, if we come into the meeting and say, ‘let’s clean sheet this again this year,’ our clients have some confidence that we’re actually trying to uncover and revisit without just jumping to conclusions.”
Question 3: How is your advisory team paid? Can they detail that for you?
Your advisory team needs to articulate what their services are going to be every year. They must also openly discuss what their fees are for the year for them to deliver the value you seek. “As a potential client, you must ensure you’re the only person paying the adviser,” says Scott Farmer. “With anyone else paying, the advice is now conflicted.”
Scott emphasises the importance of that initial meeting in steering the conversation to goals, and at that stage, away from balance sheets. “Those first questions aren’t about your
profit and loss, your income, or what product-based solutions they can address. They are more about whether the advisory team can actually help or not, and how much value they can provide.”
This article was originally published as part of “Who’s acting in your best interests?” a whitepaper published by Certainty Advice Group in October 2017.