WHO NEEDS A FINANCIAL ADVISOR?

Who needs a Financial Advisor?* Do you? Well, you might be thinking “I need a lawyer… and an accountant.  But do I need a Financial Adviser?”  Like many people (most, in fact) you probably feel that a Financial Adviser is a bit of an optional extra.  We strongly feel that this is not sound thinking. Why?  Well, you surround yourself with experts in their fields, experts in law, accounting, insurance, banking: why wouldn’t you want a finance expert as well?

 

My lawyer/accountant/banker gives me financial advice

Really? If this is your situation, you really need to ask yourself: “Why?”  You see, accountants aren’t trained to offer financial advice. Neither are lawyers, or bankers.  The only people who are (in our opinion) are Financial Advisors.

So what is a Financial Adviser then?

A professional authorized to give advice on financial products and services, such as investments, insurance, mortgages, and retirement planning. Financial advisers help clients make informed decisions to achieve their financial goals while adhering to regulatory standards.To use the term Financial Adviser a person must be registered on the Financial Service Providers Register (FSPR) and engaged by a licensed Financial Advice Provider (FAP) (or authorised body).

Um… so why do I need to talk to them?

Short Answer: Everyone will try to tell you what to do with your money (shares, housing, securities, bonds etc etc), but how do you know what’s right? This is where a Financial Adviser adds value.  A good one will gather info on your present financial situation, your goals, how risk averse you are and your family circumstances. They’ll then collate that, and make recommendations about how to get the most out of life. That might include managing your money better, reducing debt, savings and investment advice, estate planning etc. In short, the framework is designed to protect consumers, ensure transparency, and maintain high standards of financial advice in New Zealand.

Long Answer: Financial advisers are regulated to ensure they provide quality advice and act in the best interests of their clients. Here’s a simplified breakdown:

1. Regulation and Licensing: All financial advisers must be licensed by the Financial Markets Authority (FMA) under the Financial Markets Conduct Act. This licensing ensures that they meet strict standards for honesty, integrity, and competence.

2. Types of Advice: Financial advisers can offer different levels of advice:

   • Financial Advice Provider: A licensed individual or company authorized to provide financial advice services.
   • Financial Adviser: An individual working under a FAP license who gives direct advice to clients on products like mortgages, investments, or insurance.
   • Nominated Representative: Someone also working under a FAP but only allowed to give advice according to specific policies and procedures set by the FAP.

3. Duties and Responsibilities: Advisers must follow several key duties, such as:

   • Put clients’ interests first: They must prioritize clients’ needs over their own.
   • Act with care and diligence: This means giving accurate, well-considered advice.
   • Provide clear information: Advisers must be transparent about their fees, commissions, and any conflicts of interest.

4. Disclosure Requirements: Advisers must provide a disclosure statement that outlines their qualifications, how they get paid, potential conflicts of interest, and complaints-handling procedures.

5. Complaints and Dispute Resolution: If clients are unhappy with their adviser’s service, they can file complaints through independent dispute resolution schemes.

So… when should I talk to one of these people?

Now! We recommend Goodlife Financial Advice.^ And feel free to contact us for more information

*Adviser is an alternate spelling.

^We don’t receive any kickbacks, commissions or referral fees.