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Financial advice - the process
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The process of gaining financial advice varies depending on your situation and the adviser you are using. Generally the process will include the following:
- Setting goals: Identifying your lifestyle and financial goals.
- Agreeing on the scope of advice: This involves you and your adviser agreeing on the areas you wish to receive advice on.
- Gathering information: This will involve information on your finances and research the adviser will gather on appropriate strategies.
- Strategy development: Based on your goals and the information gathered the adviser will develop your individual financial plan.
- Statement of Advice: The Statement of Advice is a document your adviser will give you that details your situation, their recommendations and the specific products to support this. It will also include details on fees and charges that will apply to your financial plan.
- Implementation: Your adviser will help you implement the plan, purchase recommended products, assist with ongoing administration and provide you with regular updates and reports as agreed.
- Review: The frequency of review will depend on what level of service you have negotiated with your adviser. Reviews may be undertaken annually, every six months or quarterly.
Documentation
Your adviser is likely to provide you with a number of documents to ensure you understand the service being offered, any ownership arrangements, the recommendations made to you, the financial products recommended and analysis undertaken.
Documentation that your adviser may give you includes:
Statement of Advice
A Statement of Advice (SoA) is a document that sets out your situation, goals and your adviser’s financial recommendations. The SoA will vary from individual to individual because it has been written with your specific circumstances in mind. However, some of the common elements SoA’s should include:
- your personal details
- the adviser’s details
- the advice they've given you
- the information on which the advice is based
- fees and charges (including any commissions), and
- any interests, associations or relationships that could influence the adviser’s recommendations.
Financial Services Guide (FSG)
The Financial Services Guide (FSG) provides you with all the information about the entity providing the products the adviser is recommending. FSGs include information on the identity of the provider, contact details, how the provider and any other relevant parties are paid, the complaint process and privacy policy.
Product Disclosure Statement
Whenever a financial product is recommended to you, a Product Disclosure Statement (PDS) will be given to you. It contains detailed information about a specific product including features and benefits, fees and conditions or commissions that may affect your return.
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This has been provided for general information purposes only. It does not purport to recommend any particular adviser or provide you with financial advice. In addition to seeking financial advice, potential investors must always read the Product Disclosure Statement for the relevant product before making an investment decision.
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