What to Ask a Financial Adviser Before You Hire Them

Meeting a financial adviser for the first time can feel intimidating, particularly if you are not sure what you should be asking. Having a clear set of questions ready before you walk in - or dial in - puts you in a much stronger position to assess whether this is the right person for your situation.

Are you registered with ASIC?

This should be the first question you ask, and you should not take the answer on faith. Every person who provides personal financial advice in Australia must be registered on the ASIC Financial Advisers Register. Registration is publicly searchable and free to check. Ask for their full name as it appears on the register, then verify it yourself before you proceed.

Our guide on how to verify a financial adviser's ASIC registration explains exactly what to check and what the different registration statuses mean. As an example of what a verified adviser profile looks like, you can view the profile of Nicholas David Kidson, a Sydney-based adviser with over 45 years of experience and a clean disciplinary record.

What are you authorised to advise on?

Not all financial advisers are authorised to advise on all financial products. An adviser's authorisations are listed on the ASIC register and cover areas like superannuation, life insurance, managed investments, securities and self-managed superannuation funds. If you need advice in a specific area, confirm upfront that the adviser holds the relevant authorisation - not just that they are familiar with the topic.

This matters more than many people realise. An adviser who is not authorised to advise on a particular product should not be advising you on it, regardless of how knowledgeable they appear.

How do you charge?

Financial advisers in Australia charge in a variety of ways - flat fees for specific advice, ongoing percentage-based fees on assets under management, hourly rates, or a combination. Before you engage anyone, you need to understand exactly what you will pay and what you will receive in return.

Ask for a breakdown of all fees, including any ongoing fees if you continue the relationship beyond the initial advice. Ask whether fees are deducted directly from your superannuation or investment accounts, or whether you pay separately. Our guide on how much a financial adviser costs in Australia covers the main fee structures in detail.

Do you receive any commissions or payments from third parties?

Under Australian law, financial advisers are required to act in your best interests. They are also required to disclose any conflicts of interest, including commissions, referral fees or other payments they receive from product providers. Ask this question directly and read the Financial Services Guide they are required to give you before providing advice - it sets out exactly how they are remunerated.

Life insurance is one area where commissions are still permitted under certain conditions. If the adviser is recommending life insurance products, ask specifically whether they receive a commission and what that commission is.

What is your experience with situations like mine?

Financial advice is not one-size-fits-all. An adviser who specialises in retirement planning for people approaching 65 may not be the best fit for a 35-year-old trying to build an investment portfolio or structure a business. Ask about their experience with clients in similar circumstances to yours - similar age, similar financial situation, similar goals.

The ASIC register shows the year an adviser first provided financial advice, which gives you a sense of their overall experience in the industry. But experience in years is only part of the picture - ask specifically about experience relevant to your situation.

Who will I actually be dealing with?

In larger advice practices, the person you meet initially may not be the person who handles your ongoing advice. Ask clearly who will be managing your account, who to contact if you have questions, and whether your adviser could change without your input. This is particularly relevant if you are considering engaging a large financial planning firm rather than an individual practitioner.

What does the advice process look like?

Ask the adviser to walk you through what happens from your first meeting through to receiving a recommendation. In Australia, personal financial advice must be documented in a Statement of Advice, which sets out the recommendation, the reasoning behind it and any conflicts of interest. Ask when you will receive it, how detailed it will be and how much time you will have to review it before making any decisions.

A good adviser will be happy to explain the process clearly. Vagueness about the advice process or pressure to make decisions quickly are both warning signs.

What happens if something goes wrong?

Ask how complaints are handled. All licensed financial advisers must be members of the Australian Financial Complaints Authority (AFCA), which provides free and independent dispute resolution for consumers. If the adviser cannot confirm their AFCA membership or is unclear about the complaints process, that is cause for concern.

Our guide on how to make a complaint about a financial adviser explains the process in detail, including what AFCA can and cannot do and what options you have if things go wrong.

Before you decide

You are under no obligation to engage an adviser after an initial meeting. Take the time to check their ASIC registration, review their Financial Services Guide and consider whether their approach and experience suit your situation. You can search for and compare registered advisers in your area using the financial advisers directory, or browse by state to find advisers near you.