When considering which financial planner could potentially best suit your needs, there are a number of matters that come to mind to consider when making a choice.

The FPA have put together a checklist for consumers which may help you in the selection process.

The 3 primary questions that they have identified and suggest you consider are;

What qualifications do you have?
What do you specialise in?
And how do you charge for your services?
These are all very important considerations but they certainly are not the be all and end all.

There are many planners out there who have vast amounts of experience, hold accreditations with bodies other than the FPA and are perfectly suited by way of education and or experience to advise clients on their needs.

Specialisation is becoming more commonplace these days. With the financial world becoming a significantly more complex area in which to work, advisors who are worth their salt realise that a speciality is a natural progression in terms of their career and the needs of their preferred client model.

Equally, the Fee for service model has become a bit of a buzz word around town. The implied outcome is that if a planner charges a Fee for service, rather than rely solely on commissions, they must be better at what they do.

All of these questions are important but I believe that there is a far simpler approach that can be taken. One where the filtering process is more clearly understood and where your best interests are at the heart of the question.

The real question is “Who owns the dealer group through which the planner I am considering is licenced”?

Let’s assume for a moment that all three of the questions that the FPA suggest are in the affirmative. Further, let’s also assume that the person you are considering is personable, empathetic, a good listener and can in simple easy to understand terms, wrap up your concerns and needs succinctly and provide appropriate financial planning advice to ensure that you have the greatest probability of meeting your stated goals.

This all boils down to understanding relationships.

There are three ways that planners can be licenced to work in Australia. Planners can be;

licenced through a dealer group that is institutionally or platform owned and is overtly branded as such (A CBA Bank Branch for example)
licenced through a dealer group that is institutionally or platform owned and is not obviously branded as such (RetireInvest (RI Advice Group)owned by ANZ Bank for example)
licenced through an independent privately owned dealer group that is free of undue Institutional influence.
I don’t for one second denigrate the overtly owned model. You may value the Banks reputation and feel comfortable with the products, staff and advice. And this is completely acceptable as long as you recognise that most of these institutional models reward their financial planners (sales and target driven) on the basis of new business written rather than on ongoing service.

Nor do I denigrate the “Not obviously branded” Institutionally or platform dealer groups out there. Whilst I personally know many planners who deliver advice and product recommendations that are not directed to the institutionally owned products, it is fair to say that they are in the minority. Money management have prepared a table of the fastest growing and contracting dealer groups in the country. See if you can work out which of those business listed are institutionally owned…

The third group of planners in the market are those who have moved to an independent (non-aligned) model. More often than not, they recognise that Australian consumers are more aware than ever before and understand the importance of seeking advice from a professional that is free of any undue influence from an institutional owner.

Consumers seeking financial planning services in Australia are becoming savvier. In making a choice about who they wish to have manage their affairs, the choice should be as simple as this.

Do I want my Bank to assist with my planning or would I prefer to use someone who is licenced through a private, independently owned dealer group?

Neither one is the correct choice. Who you choose to deal with is completely dependent upon how you feel about this fundamental choice. However, imagine having decided to use the latter, you establish that you have in fact wound up with the former.

This Post has been written by Anthony Stedman
LifeTime Financial Group
An independently owned Melbourne based Financial Planning Group