One thing that you need to remember when searching for a financial adviser is that it is up to you to decide if the advise is good or not. After all it is your money. After the first meeting with your financial adviser, you will need to carry out some further research. You will be given some written recommendation during a one-on-one meeting where the financial adviser will explain what they recommend and discuss the reason why they choose one product over the other.
You will be given:
- A statement of advice. This is where the recommendations of the financial adviser is usually contained. It is important for the work to be taken through document review and analysis. Ensure that you have also reviewed the document to find out whether it is in line with your objectives and needs
- A product disclosure statement (PDS) for every product that will be recommended. This document contain the feature of each of these products
Before you can sign any document, make sure that you have read and even understood these documents.
A review of the advice
You will need to go through the advice to ensure that it is able to address your goals and also consider your personal circumstances as well as financial situations. Before you agree on anything, make sure that you have take the SOA home for further scrutiny. The financial adviser may also attach other documents that they may require you to scrutiny. Ensure that you go through this advice keenly. It is also a good idea to ensure that you have gone through that advice in stages, even as you start with the overall strategy before going deeper into details.
Make sure that you have noted down any questions that you may have while reading the PDS and SOA. If you are unsure of how the strategy or product is outlined in SOA will help you meet your financial goal, be sure to ask for clarification. If there words and phrases in SOA and the PDS that are not clear, make sure to ask questions.
Important features of SOA
There are several things that you need to look out for in the statement of advice. These include:
The objectives and needs of your situation
- Does the SOA tackle the reason why you were seeking for the advice?
- Does it have recommendations that are customized for you or was it written for another client?
- Does the SOA address your goals and circumstances
- Does it refer to your income, expenses, assets and liabilities
- Does the soa have your risk profile and the reason why the risk profile is the right one for you
Strategy and cope
- Does the SOA have a scope that is well-defined and explain the advice that is being provided or not
- Do you have complex financial needs and does it have strategic options including pros and cons
- Does the SOA provide you with a projection of cash flows where these are relevant and provide a recommended strategy that fits your incomes & expenses