Need to Know | I want a financial adviser, what should I do?

Candice: [00:00:10] Hello and welcome to talk money to me. This is your need to know financial podcasts. Thanks so much for joining us. I'm Candice Bourke. Felicity: [00:00:18] And I'm Felicity Thomas. And we're two financial advisors have worked together for the past five years. Now we often get told by clients that we have a knack for making the complex simple when it comes to financial strategies. And today we've got a very special guest joining us. Candice: [00:00:34] But before we reveal exactly who our special guest is, let's just quickly get our disclaimer out of the way. As always, this is not considered personal advice. What we talk about on here talk money to me, even though we are registered financial advisors at Shaw & partners. So please note the podcasts and the content discussed does not constitute financial advice, nor is it a financial product. So without further ado, welcome Sascha to our show, who is actually our executive producer here at Talk Money to Me. Sascha Kelly: [00:01:01] Thank you, Felicity and Candice, for having me on the show. I'm so excited. I've got a big question to ask you that I've just been dying to ask you since I've known you. Basically. Felicity: [00:01:11] Yes. I guess I should probably give a little bit of background what this episode is going to be about. Right. So you said that you were searching for a financial advisor. So what Sascha came up with is why don't we do a need to know episode on what you actually need to look for when searching for the right financial advisor? Sascha Kelly: [00:01:28] Exactly. Because I've been looking after myself for quite some time, but sitting with you both, I've got so many insights and so much information about what can be possible with my money and what can be possible for the next ten, 20, 30, 40 years of my life. And I thought maybe, you know, I have been investing for about a decade. Maybe now is the time to start looking if I need professional help. And I thought, why don't I workshop all these questions with you two on Mic Felicity: [00:01:58] So exciting. Let's get. Candice: [00:01:59] Into it. Felicity: [00:01:59] And we hope that everyone likes it. Yeah, let's get into it. So what is your first question? Sascha Kelly: [00:02:05] Excellent. So I just thought we'll start with the basics. When do you think someone's ready for an advisor? What situation would you be looking at that you think that is the perfect entry place to go and seek professional financial advice? Felicity: [00:02:19] Okay. Well, I think that we could both actually probably answer this question for you, but I think as soon as possible is the right time to seek a financial advisor just because you want to set yourself up correctly in the first place. You know, from the get go whilst you're young now a lot of people think, Oh, I don't have enough money, you know, I know, I know financial advisor actually wants to see me, but that's not the case. There are many great financial advisors, but you also do need to be willing to fork out a little bit of money to get that advice right, because we have also spent years and years on our education to ensure that, you know, we can provide this great financial advice. Sascha Kelly: [00:02:56] Do you agree, Candice? Candice: [00:02:57] I do. And I was just going to say to add to that, I think also when you have major milestones, right. So if you're thinking about purchasing a property, if potentially you've had a promotion at work, are you thinking of starting a family? You know, when you have these big financial goals and objectives, that's when you might have more of a clear idea on where you want to get in the next five, ten years. And it's the perfect time to sit down with an advisor. Or if you've sold a property, maybe you've got questions about your tax coming up. You know, lots of big milestones like that is a great time to to do some investigation and begin the conversation. Sascha Kelly: [00:03:34] So to be a bit of a devil's advocate, if I've got a really great accountant and I love I mean, I work at Equity Mates, so I love investing and I love kind of being involved in it myself. Is it still worth me getting a financial adviser? Felicity: [00:03:48] Do you know what your goals and objectives are for your financial over the long term? Candice: [00:03:54] A lot of people don't. That's alright. Felicity: [00:03:56] Well then my answer is yes, right? Because a financial adviser actually helps you uncover what your financial goals and objectives are. Because a lot of a lot of our clients don't really know what they what they want until we kind of, you know, help them uncover exactly what they want to achieve by the next 1 to 5, ten, 15 years. So, you know, accountants kind of sometimes look backwards. I suppose a financial advisor is really looking forwards and you don't want to leave the advice to light either. So coming up to end of 30 June and a financial year, you know, you don't want to be seen an advisor two weeks out. You really need to look at, you know, seeking that advice, you know, a lot earlier. Sascha Kelly: [00:04:35] Okay. Well, you've picked up a few things there that I want to talk about. But first, so you've convinced me. I mean, you've done a pretty good job. I'm very I'm pretty convinced. But yes. So say I've decided that I'm definitely going to go seek financial advice. Is there a database for people's credentials? Should I be asking friends for recommendations? What's the best process for me to go about? Finding my options of who's going to be a reliable financial advisor yet. Felicity: [00:05:04] So there are a couple of different websites that you can go to. Probably the most reputable would be the money smart discovery you financial advisor register. Now you can actually search myself. You can search Candace. You can search any financial advisor that's potentially been recommended to you as well. And this will show you when the advisor started giving advice and what they can actually provide advice on because not all financial advisors are the same. There's also another website called Advisor Ratings, but again, that doesn't actually have all financial advisors. But that is another good start. Candace Is there anywhere else? Candice: [00:05:41] Well, I would also say with, you know, technology these days, whip out your phone shop on LinkedIn because every professional person has a LinkedIn profile these days and you can see what their interests are, what they're blogging about, you know, their career path and their qualifications. And I think, you know, to touch on your point, Sascha, who do you currently talk to about your finances and money? Like if it's your dad, your friend, an accountant, whoever? That's a good starting point to say, hey, I'm thinking about getting an advisor. Where do you suggest or do you know anyone? Because if they've obviously had a trusted relationship with them, then it's a good starting point for you to have a conversation. Felicity: [00:06:20] And what I also want to point out is that Melissa Caddick was actually not on the money smart financial advisor register. So if all of her, I guess, victims had looked on money smart, they would have seen that she is not a registered financial advisor. Therefore, they should not be giving their hard earned money to her and probably avoid Instagram. Candice: [00:06:38] Right? Like you want to stick to professional websites that like office is gone through all LinkedIn, right? There's a lot of young people can fall into the trap of finding advice on TikTok, Instagram, which could do more harm than good. Sascha Kelly: [00:06:55] I was going to say I have a fully fledged TikTok and Instagram addiction, but I'm taking from this that's definitely not where I'm going to find my advice. So I want to pick up on the fact that before Felicity, you said, you know, you asked me what my financial goals are and I admitted that I've not done a lot of thought about that at all. So that's something that a financial advisor would help me uncover in our sessions, I imagine, but what other things that I should be doing ahead of our first meeting? What should I be preparing or making sure that I've got in order so that I'm turning up to use your valuable time in the best way possible? Felicity: [00:07:32] Yeah. So look, I think there's a few parts to add to that question, but what we generally would like in a meeting pending what you you're actually seeking advice on, but let's say you're a holistic advice client, we would say please bring copies of your superannuation statement, any insurances that you may have prior to the meeting. We also do send a budget tool so that we can work out your cash flow because that's really, really important when putting together a financial plan, you know, put together any copies of your portfolio so that you do have that would be great to know you're actually invested in Candace What else? Candice: [00:08:06] I think if you're talking about investments, you know, come into the meeting with some ideas that you'd like to talk about, you know, are you an ESG investor? Are you not? What are you what are your thoughts on the market the moment? And then I guess a lot of questions back on them. You know, what's your experience? How many clients do you have? What's your funds under management? What's your fees? So there's no right or wrong answer to it. It's a bit like a blind date, right? You're going into this meeting, meeting for the first time. It can be a little bit awkward. You don't you can hold your cards, you don't have to show everything. But I guess if it's going well in a first meeting, you're opening up. That's what we find. You're sharing more ideas and objectives and you're sort of basing your trust in us at an early stage to really unpack that goals. And we hope that you walk away, Sascha, from that meeting going, Wow, I went with a list of questions and my staff in front of me, but my head's like exploding with ideas because I can see the value of having an advisor to get me from where I am today to where I want to be and, you know, five, ten years time. Felicity: [00:09:13] And I don't think you actually need to bring if you don't have everything, it's not a problem. Right? Because the first meeting are not actually going to be getting the financial advice. It's just a conversation. So if you don't bring everything, it's not generally a problem. Sascha Kelly: [00:09:26] Yeah. So you did say it was like a blind date. You know that I often organise drinks as a first date because then you're not committed to dinner or coffee because you're. Felicity: [00:09:37] Not you're. Sascha Kelly: [00:09:37] Not going to be there for hours and hours. You only just 15 minutes and then you can be like, Oh, I forgot I had an emergency. So is that similar with financial advisors? Is it appropriate for me to say, can I organise a call? Can I, you know, do a bit of a chemistry test before I turn up to a meeting and kind of waste? I don't want to say waste, but that's what we're talking about, really wasting your time. I'm on a client meeting. Candice: [00:10:00] No, definitely 100%. You've raised a really good point. I think the first point of call, if they're comfortable, is a phone call could be 10 minutes long, could be half an hour long. Like we're very different to other advisors, so we can't speak for the whole, you know, network, but that's how we do it. And then we'll set up a face to face which might take 30 to 45 minutes, and then subsequently after that, it might be a third meeting to say, well, you're obviously keen, we've talked about your goals and objectives. Now let's talk about next steps and how we can actually work together as a client advisor relationship. But you know, with the world that we live in, a phone call can be a zoom for 15 minutes too. So it's a soft well, at least I've met you once rather than just talking on LinkedIn. Sascha Kelly: [00:10:46] So then I guess we've kind of talked about what your ideal would be for a first client meeting, but what are red flags from both sides? So what do you look for as kind of red flags in a client, but also me as a potential client? What should I be thinking? Oh, my gosh, this is giving me Melissa Caddick vibe or giving me the sense that I should be swiftly looking for the door and calling this first date to an end. Felicity: [00:11:11] Look, I think that I think that we're pretty transparent. Right. But we also we want to give away quite a bit in our first meeting, but we can't give away everything. Right. So, you know, our red flag would be someone that wants everything right away, wants to know what to do in that very first meeting, because we need to provide you with a statement of advice. And that takes a lot of time and actually research and putting that advice document together. So that would be a red flag for us, someone, you know, trying to push for as much information as possible without actually committing to going next steps. And we you know, Candice and I put together a bit of a letter of engagement after our first meeting advising, you know, what your goals are, how we've understood it, and how we can provide that advice. So that would be probably a red flag for me. From a client perspective, though, a red flag would be an advisor pushing product in the first meeting because you're not allowed to at all talk about products in the first meeting. Sascha Kelly: [00:12:10] And so what do you mean? Can you elaborate on what products means is that I think I've seen, you know, you can buy properties off of plan or like a development. Is that is that those kind of products that you're talking about or is it investment vehicles or is it both? Felicity: [00:12:24] Well, you know what what is interesting is financial advisors aren't really registered to give direct property advice. So no financial advisor should really be advising you to purchase direct property off the plan. Candice: [00:12:37] So red flag for that one for sure product she means Sascha is hey, you should go into this managed fund. It's a financial product unlike our podcast, right? Felicity: [00:12:47] Yeah. Like this platform. Right. So if you are going to this platform, you know, the the banks actually got in a lot of trouble for pushing products. So, for example, let's take batting insurance. You know, financial advisors, I bet, were told to sell bating insurance. Right. But the insurance product might not be the best one for your circumstances because all different insurances have different characteristics that are good for different, I guess, occupations and requirements. So talking about that in the first meeting would probably be a red flag for me. Candice: [00:13:18] Yeah, I guess to go further on to that point, if the advisor is vertically integrated, right. So you have to use their products, you have to use their system, you have to use their account and you have to always have to use. They're not agnostic. That would be a little red flag. And I think another obvious red flag for us as advisors, if if a prospect is saying, I need to move money from the Cayman Islands to Sydney to this and there obviously that sounds like money anti laundering activities going on and that's a bit of a no go for us as advisors. So as as our role and our duties, we have a duty of care for our clients. Right? So at the end of the day, it's, it's a personal relationship based on trust that's ongoing over the many years to come. So for us, we really take it serious and we do try and be as very transparent as we possibly can with our fees and how we work with our clients. Felicity: [00:14:13] And I think we're also talking about this offline. You know, what do financial advisors actually do? You know, what can they actually provide advice on? Because we always get asked that question. You know, I don't know if that's something that a lot of listeners have been asking, you know, what does a financial advisor do? So essentially, we can do a lot, right? So we can provide advice on superannuation insurance, managing debt, retirement and your pension. Candice: [00:14:38] I'm just going to interrupt you there. When she's saying these things, guys, the advisor has to swim in their lane. So go back to make sure that they're qualified for these types of scoping advice that she's listing. Sascha Kelly: [00:14:48] And can I just ask, is that because that is the type of advice on money smart archive day you or it would be on their LinkedIn profile saying I specialise in these areas like that's kind of infamous. If they're a good adviser, will be upfront on their website, on their collateral, on their marketing materials. Candice: [00:15:05] Yeah. I mean, think of it this way. You don't go to a car salesman to buy a boat, right? Felicity: [00:15:10] Like it'll be on money. Smart. Right. So Money Smart has you actually have to upload all of your qualifications on money smart so you can search, like, you know, happy for everyone to have a search on me. On money. Smart. You can say my qualifications and you can say what I am allowed to give advice in. So to finish that off and to finalise going through what an advisor can actually do, you can speak to the if you're going through financial hardship, you know, they can talk about shares and investments. They can talk about margin lending, self-managed super funds. You know, if you're going to the later stage of your life, that can help with aged care, cash flow and income, you know, expat finance as well, which is something that a financial advisor can provide advice in different tax strategies, other borrowing strategies, as well as small business advice. Then you've got your wills and estates. So, you know, there's a huge a breadth of offerings that financial advisors can provide. Some people, like you said, will specialise in things, and some people are more of a generalist. So it depends on, you know, what kind of advice, you know, whether it's holistic or it's investment only it's or insurance only, you know, it really depends. Candice: [00:16:17] Exactly right. Felicity So it's really about thinking about what kind of advice you want and then finding the right hopefully advisor for you. But let's just take a short break. We're just going to pause this little blind date for the moment so we can run to the bathroom and hear from our sponsors. And we're back. So, Sascha, I guess we've gone through, you know, how to start thinking about getting an adviser, some really great tools and websites, where to go looking for their qualifications. Now, let's assume in this scenario you've you've had the first zoom or the first call. You've gone into the meeting and you're halfway through the meeting. What other questions have you got kind of for us while you've got us? Sascha Kelly: [00:16:56] Well, I've been wondering how much a financial adviser would cost, and I understand that it's not going to be a blanket cost across the board. And you might not even be able to tell me how much it would cost. But what number should I be? Ballpark thinking about allocating towards financial advice? Felicity: [00:17:13] Yeah. I mean, what I would generally expect and some advisors are different, but we don't usually charge for our first meeting. It's complimentary because we actually want to get to know our potential client and whether we do have that, I guess good vibe and whether we do think we can actually provide valuable advice. You know, our statements of advice, which would be the fee that you pay for the document, ranges from about $550 to six and a half thousand dollars, sometimes a little bit more pending on the complexity of the advice. But let's assume that you just wanting to do a super review and insurance review and maybe start an investment portfolio. A lot of advisors would charge between maybe three and a half to four and a half thousand for that statement of advice. So, yes, it is a significant chunk, but it is definitely worth it. And pending on what kind of advice you do get, some of it or all of it can actually be paid from your superannuation, which is also positive. Then you've also got ongoing advice. If you do decide to take up an ongoing advice fee arrangement, this can be flat or it can be a percentage based Candace and a percentage based because we believe that our face should grow with the performance of the portfolios that we have put together for you. Candice: [00:18:28] And I think a good comparison is if you're familiar with the markets and you're already an investor, like you said, Sascha, for over a decade, you know that ETFs range, right? Some are as low as 0.12% management fee all the way to like 1%. And it's the same with advisors. So depending on the offering that the advisor's is going to talk to you about, you know, that's the fee will range in our opinion. It should range it should be economics of scale because obviously in my opinion, the more money you have, the fee should come down in in our opinion. Right. And it's an ongoing relationship. So you really want to be incentivised as an advisor to grow and preserve your client's wealth over the long duration. Felicity: [00:19:11] And also, there's one more fee that we didn't mention is so you've got your potentially initial meeting fee, you've got the statement of advice fee, you have the an implementation phase. So some advisors charge to implement the advice because it is a lot of it's quite time consuming and there is a lot of paperwork and a lot of moving parts. So there is sometimes a charge there. And then you've also got your ongoing advice phase. So this kind of for potential fees that you could be up for. Candice: [00:19:37] And I guess to wrap it all up, though, if you do decide to go ahead that you get given a statement of advice document, which you referred to a few times that goes through all of the fees. So at any point in time you can refer to that, which is great. Sascha Kelly: [00:19:49] We're quickly running out of time, but I've got a couple more questions for you. First of all, is that I've read that certain advisors have like a minimum you have a minimum number of assets for them to even consider you. Is that something also on money smart that I can look for? Like if I'm only if if my total assets are under 100,000 or between 100,000 and 500,000, are certain advisors not going to want to look after me? Candice: [00:20:15] I don't think it is, but correct me if I'm wrong, but I do know that on the ASX website they do have a find an advisor tool there and depending how the advisor wrote their profile, that has minimums on that. So I'm but I'm not actually sure on the money. So that's a good question. Felicity: [00:20:33] Now it's not on the money smart, but it is on the ASX. Find an advisor. So that is find an advisor dot ASX scheme today you saw that could be a good one because you can provide your investible assets there. Sascha Kelly: [00:20:45] Excellent. Well, we've talked a lot about this dating analogy and I don't know about you too, but I know that part of dating is sometimes you get broken up with. So how would you ideally like for someone to leave you if they've decided they no longer want a financial advisor or they don't want to proceed? What should you be? What way should you be telling your financial advisor that you're moving on? Candice: [00:21:10] Yeah. I mean, breaking up is not fun and it's not and not a great day for an advisor. That happens because obviously something has gone wrong there along the way, but it does happen. That's a reality. And I guess depending coming back to depends on what you're invested in, what product you're in, you know, if you're on a hinge system or an SRN even better and you just buying and selling shares and that's all you want from us. Then it's really easy to break up, so to speak. But I guess, you know, at that point, hopefully the advisor has had many conversations. It's not just wake up one morning and all of a sudden their advice is going to end. It's hopefully managed between you and advisor over a period of time. But at the end of the day, like coming back to that point earlier, it's the duty of care. So if the client wants to leave, the end of the day, they're more than welcome to do that. And the advisors role there is to is to help. Felicity: [00:22:03] I guess it's the reason for the break up. Is it because you feel like you understand your finances a lot more and want to take control? You know what would be the reason? Or you're just not happy with the relationship. Not happy with the performance. Don't actually feel that you're getting value for money. Sascha Kelly: [00:22:18] Yeah. Or maybe I was thinking more. It's that you've been seeing these red flags and you're suddenly thinking, Oh, maybe I'm with the wrong fit. Yeah. Or I'm with someone who there's a better option out there. I started doing my due diligence on money, smart dot gov, dot aew and I've realised that there is a better fit and I'd like to move my finances across. Felicity: [00:22:40] Just be honest. I think, you know honesty is the best policy and just speak to your advisors. Tell them why you feel that there's potentially not a good fit and then they can potentially talk through the issue with you. And I'm sure you can, you know, pot down good ways, right? If you are honest and open about. Sascha Kelly: [00:22:57] It, well, I think we should leave it there because I can't imagine anyone leaving you to. I certainly wouldn't. But that's been really helpful. And I think it's answered a lot of the questions I had about trying to find a financial advisor, what my next steps should be. Candice: [00:23:11] Yeah, I mean, and let's do another one. This has been fun. Sascha Kelly: [00:23:13] Yeah, absolutely. Felicity: [00:23:14] All right. Candice: [00:23:14] Well, that's a wrap, guys. So we hope you took some value out of that conversation with our amazing producer, Sascha. But as a reminder, before we sign off, please note that although for senior financial advisors, actuary partners, as always, the discussion today does not constitute as personal advice you should always likely talk through in this podcast episode today. Go out there, speak to your professional advisor before you make your investment decisions. Felicity: [00:23:40] That's it. And you know, if you did like this episode and you want more episodes like this, please reach out to us at TMTM at Equity Mates dot com and we absolutely love a five star review on Apple Podcasts Spotify. Until next time. Candice: [00:23:54] See you then.