When it comes to financial advice, it pays to get it right. For most people the best way to sort their finances is by using a financial adviser. An adviser can help you long term, not just today or tomorrow.
Maybe you’re not sure what you need to do or maybe you don’t have the time. Whatever your reasons, using an adviser has some great benefits – from helping you reach your financial goals and future-proofing your finances to tailoring products to your unique circumstances.
How an adviser can help
An adviser can help and add value in many ways, including:
- helping you identify your priorities
- helping you budget and manage your money
- choosing the right investment strategy
- financially protecting you and your family
- recommending the right products for your needs
- helping you plan for retirement
- balancing your risks
- talking you through your different options.
Why using an adviser is valuable
You might share favourite recipes with your loved ones, but it’s not a good idea to share financial advice. What they’re doing financially will suit their needs, but probably not yours. Instead consider using an adviser if:
- you’re time poor and can’t devote time to looking after your finances
- you’d like to review your finances and develop a financial plan
- you need advice on insurance, savings or KiwiSaver
- you want to know how to invest
- you’d like to plan for a life event, like retirement.
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The financial advice processShow more
Getting financial advice and making a plan can help you achieve your future financial goals. The process looks like this:
Step 1: issue disclosure statement
Your adviser should provide you with a copy of their disclosure statement. It outlines information which can include:
- what products and services they can provide
- who they work for.
Step 2: understand your needs
See ‘What an adviser needs to know’ for the sort of information your adviser needs to know and will ask you at your first meeting. This stage also involves setting the scope of advice they can provide and any costs involved.
Step 3: prepare written recommendations
Your adviser will now prepare their recommendations to help you meet your financial goals. These will come in a document called a Statement of Advice (SOA). Your adviser’s recommendations will be developed through an analysis of different options and products, based on your goals at this stage.
Step 4: present advice and agree
Your adviser will present your SOA and explain how it matches your needs. Your adviser should also explain any risks and costs associated with the SOA.
When you’ve reviewed the SOA, it’s a good opportunity to ask your adviser any additional questions to check that:
- the advice has been tailored to you, using the information you provided
- you understand the advantages and disadvantages.
If your adviser has recommended any products, they also need to provide you with documentation to help you understand how they work.
After this you’ll agree your strategy. This may be the same as the SOA, or a modified version. It’s completely up to you to decide how or whether to follow the recommendations in the SOA.
Step 5: implement
Once you’ve agreed your strategy, your adviser will help you put your plan in place. This may include helping to complete any application forms and documents.
Step 6: review
Your adviser will review your plan with you over time, to make sure it remains appropriate based on your situation and goals.
What an adviser needs to knowShow more
When you meet your adviser for the first time, they’ll have questions about you, your life and your finances. This helps them to understand your current financial situation and your future goals, so they can provide you with tailored advice.
They may ask about:
- you – your age, your health and any children you have
- your goals
- your business (if you have one) - how long it’s been running, how it’s performing and the running costs
- your retirement savings scheme and insurance details
- your income and expenses - including any future income, inheritance and future expenses
- your investments - current and planned investments, assets and liabilities
Once your adviser has got this information, they’ll come back to you with their advice. It’s then up to you to decide how to use their recommendations.
Important informationShow more
While care has been taken to supply information in this article that is accurate, none of AMP Services (NZ) Limited or any of its related companies gives any warranty of reliability or accuracy, or accepts any responsibility arising in any way including from any error or omission.