<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=3003101069777853&amp;ev=PageView&amp;noscript=1">

How to select the financial adviser who's right for you

In this video you will learn:

  • How the role of an adviser has changed
  • Why not all advisers are the same
  • Why it's important to know how you're paying your adviser



Robin Powell: Hello again. There may be a few people who can manage without, but sooner or later the vast majority of us need a financial adviser. So, how do you go about choosing one?

Michael Kitces is a well-renowned authority on this subject. He says that it’s important to realise that the role of an adviser, or financial planner as he prefers to call them, has changed considerably over the years.

Michael Kitces: If I go back 20 years ago, "Do you need an adviser?" was basically saying how else would you find great actively managed mutual funds to pick. You need an adviser to help you pick them, to search and select them. That certainly is dying away. Both struggles and the active managed fund industry. And to say the least, if a consumer wants to find an actively managed mutual fund, you go to Google and type in “mutual funds” and you find endless information about it. So the idea of advisers providing information about investment opportunities is quickly going away. And what we’re seeing taking this place is the rise of, what I would call, true bonafide financial planning. Which is: I’m actually going to help you draw the holistic picture of all of your investments, goals, everything you’re trying to achieve, I'm going to bring the expertise about the taxes and the investments and retirement strategies and all the different pieces that go along with it to actually give you a value proposition that’s more than, “I’ve picked a couple of investments that could get good returns.”

Robin Powell: Sadly, a large proportions of those who call themselves advisers are in fact little more than salespeople. It’s vital therefore who choose one who has your best interest at heart.

Michael Kitces: A financial advice has to move beyond purely things like investment and insurance product selection, right? Like it needs to actually be about advice, which means to me, first and foremost, you need an adviser who actually has some expertise and competency and training in order to do that. So, does the advisor have a recognised credential or professional education for it? Once you get beyond that then I think it comes quickly comes to your ability to interact with your adviser. Is this someone you’re comfortable with? Is this someone you can communicate with?

Robin Powell: But even if you get on with the particular adviser, don’t sign up until you’re sure that, financially speaking, his goals and yours are aligned.

Michael Kitces: The trend that we’re now seeing, worldwide, is the decline of commission-based advisers and the rise of advisers that are either being paid standalone financial planning fees, or perhaps have fees that are attached to investments and other management so at least for all lines that as your investment assets and net worth grows, my business grows as well so I’m very incentivized to make sure that things going well for you. So managing costs and expenses and getting reasonable performance is actually good for me as the adviser as well as you as the client rather than: “Hey, I’ll sell you a fund and I’ll get paid and if you don’t like it, that’s actually good because that means I can sell you a new one or replace the old one and get paid again."

Robin Powell: Thank you to Michael Kitces and until next time. Goodbye.

Video library

Digestible content designed for your success.

Ready to start the conversation?

We'll call, learn about you and help you decide if we're a good fit. It's that easy.