When Is A Financial Adviser not a Financial Adviser?

When Is A Financial Adviser not a Financial Adviser?


Probably one of the most common questions that we get asked when we meet a new client for the first time is what is the definition of a financial adviser? According to Wikipedia, the definition of a financial adviser is:

“…a professional who renders financial services to individuals, businesses and governments. This can involve investment advice, which may include pension planning, and/or advice on life insurance and other insurances such as income protection insurance, critical illness insurance etc., and/or advice on mortgages.”

Probably the easiest and most simplistic way of answering this is that it all comes down to who’s paying the bill. It is our opinion that only when a client engages a financial adviser and pays for a service to be provided that this person can reasonably be called a financial adviser. The reason I say this is that the client is paying the adviser to provide specific financial advice that relates to this particular person and unless the adviser has the skills and experience to provide this service then very rarely would a client be willing to pay them a fee. Do your homework on the adviser. Have they been working in the industry long? Have they jumped around from different industries? Where are they licensed? LinkedIn is a very useful tool for this.

There are a lot of companies around who have so-called financial advisers in their employ that claim the ability to provide specialist financial advice to expatriates yet in fact all they are doing is selling a generic packaged product without taking into account the clients personal circumstances. They are in turn remunerated by the product provider and not the client. Remember the age-old adage – nothing in life is free (especially good financial advice)! In this scenario I find it difficult for this person to call themselves a financial adviser when in actual fact all they are doing is taking on the role as a sales person.

If you do hire a financial adviser, make sure they understand and take into account not only your circumstances as an expatriate but also the ramifications should you return back to Australia.

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