Mon, 23 Apr 2012
Most of us know that getting advice from a financial adviser can help us achieve our financial goals, whatever they may be. However, many of us can only determine the quality of that advice after many years, following the success or failure of the recommended strategies. This is because we generally only see one financial adviser, so we don’t have the opportunity to compare services.
To address this, the financial services regulator, the Australian Securities and Investments Commission (ASIC), conducted a "shadow shopping" study. They sent their representatives to 279 financial advisers and then rated the advice they received.
ASIC found that only two examples of advice, or 3%, were considered good quality. The majority of the advice examples, or 58%, were adequate and the rest were considered poor quality. So how do we determine if the advice we’ve received is good quality?
This is how ASIC has characterised good-quality advice:
- It demonstrates that the adviser has improved the client’s financial situation.
- The adviser has clearly defined the scope of the advice and obtained detailed information about the client’s relevant objectives, financial situation or needs.
- The adviser assists the client to set and prioritise specific and measurable goals and objectives.
- The strategy meets the client’s relevant personal circumstances well, is specific, measurable and achievable, does not expose the client to more risk than necessary, and presents options (where relevant).
- The adviser considers the wider impact of the advice (where relevant) – for example, the tax or social security consequences.
- There is evidence of good communication with the client. This includes Statements of Advice that are logically structured and easy to understand, and verbal interactions that aim to ensure that the advice and recommendations are understood.
- The products meet the strategy.
While some of these are still hard for us to evaluate without comparison, or significant financial knowledge, it does highlight the importance of communication. Your financial adviser should find out a lot about your personal objectives, financial situation, needs and attitudes to risk. They should also be presenting you with different options to choose from.
This information has been prepared by Perpetual Investment Management Limited (PIML) ABN 18 000 866 535, AFSL 234426. It is general information only and is not intended to provide you with financial advice or take into account your objectives, financial situation or needs. You should consider, with a financial adviser, whether the information is suitable for your circumstances. The views expressed in this article are the opinions of the author at the time of writing and do not constitute a recommendation to act. Any information referenced in the article is believed to be accurate at the time of compilation and is provided by Perpetual in good faith. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information.
Wed, 12 Jun 2013
The recipients of the prestigious Helen Lempriere Scholarships for 2013 have been announced. Find out more
Mon, 03 Jun 2013
Please be aware there are two website outages planned for this long weekend 8-10 June. Find out more
Mon, 25 Feb 2013
Perpetual Investments has been named Fund Manager of the Year by Morningstar in its Morningstar Awards 2013. Find out more
Fri, 09 Mar 2012
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Wed, 23 Jan 2013
Transfer of traditional trustee services to Perpetual Trustee Company Limited Find out more
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Perpetual Investments has been awarded a $165 million Australian equities mandate. Find out more
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Perpetual has distributed over $1.6 million in funding to Australian biomedical researchers on behalf of the Ramaciotti Foundations.
Professor Katherine North AM, the researcher responsible for discovering the ‘gene for speed’ has been awarded the prestigious Ramaciotti Medal for Excellence in Biomedical Research and a $50,000 grant. Find out more
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Thu, 12 Jul 2012
Perpetual has distributed $12.5 million in funding for NFPs during its annual funding round, up from $9.1 million in 2011. Find out more
Mon, 25 Jun 2012
Perpetual releases Transformation 2015 strategy to achieve vision of becoming Australia’s largest independent wealth manager of choice. Find out more
Wed, 09 May 2012
An analysis of the Federal Government's 2012/13 Budget, delivered on 8 May 2012. Find out more
Mon, 23 Apr 2012
Most of us know that getting advice from a financial adviser can help us achieve our financial goals, whatever they may be. However, many of us can only determine the quality of that advice after many years, following the success or failure of the recommended strategies. This is because we generally only see one financial adviser, so we don’t have the opportunity to compare services. Find out more
Wed, 11 Apr 2012
The limitations of European solutions are concerning investor. The market’s four month rally has faded and Europe’s troubles have spread into the bigger economies, Matt Sherwood, head of investment markets research, Perpetual Investments, provides this market update. Find out more
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Thu, 23 Feb 2012
ASX announcement Find out more
Fri, 09 Mar 2012
As many clients know from painful experience, share funds can suffer losses quickly. That was certainly the case during the GFC when sharemarkets around the world sank. Find out more
Mon, 06 Feb 2012
The Perpetual Limited Board has appointed Mr Geoff Lloyd as Chief Executive Officer and Managing Director, effective 06 February 2012. Find out more
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Estate planning is an essential part of managing your finances, especially if you have a family, a business or a complex financial situation. Find out more
Mon, 15 Aug 2011
Perpetual Investments has partnered with Wellington Management Company, LLP (Wellington Management) to manage the Perpetual International Share funds, giving clients access to a world class manufacturer of international equities products. Find out more
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