Why get your financial advice from a licensed financial advisor?
Seeking financial advice from licensed advisors ensures compliance, minimum standards, and professional expertise.
Raf Epstein, ASIC Chief Operating Officer Warren Day, recently shared his finance journey and advice on ABC Melbourne. He shared his early financing experience, with his mum advising him to open a bank account and when he progressed to share, he sought advice from a licensed sharebroker. Warren states “Using a licensed financial adviser is important because it controls the kinds of financial products a licensee or their authorised representative can offer and whether they can operate legally in Australia. It also guarantees you minimum standards, including training and ongoing compliance requirements.”
When providing personal advice, licensed advisers are legally required to act in your best interests and provide advice that considers your circumstances, based on their professional knowledge and expertise.
While using a licensed adviser doesn’t guarantee against financial loss, dealing with licensed professionals provides necessary safeguards if things go wrong. This may include remediation of investors who have suffered loss or detriment due to misconduct or other compliance failures by an advice licensee (or its representatives) in giving personal advice. Importantly, it also includes recourse to the Australian Financial Complaints Authority (AFCA), a free external dispute resolution body.
A recommendation from a friend may seem like a good idea, but Warren says you should always independently check that person is licensed or authorised to provide advice through a licensee. Many scams are known to operate through social networks and referrals.
It pays to do your homework and check that your adviser is both qualified and licensed or authorised, to do the job. You can easily check on the Financial Advisers Register.
What is a Financial Advisers Register?
The Financial Advisers Register (FAR) is a register of people who provide personal advice on various financial products, such as securities, superannuation and life insurance. It allows consumers to check that a financial adviser is authorised to provide personal advice and find information about an adviser before getting financial advice from them.
‘You can search this register to find out where a financial adviser is licensed or authorised, their qualifications, training and what products they can advise on.
The FAR also shows any action taken against an adviser, such as anyone banned from financial services, Warren said.
Making your own financial decisions
Warren urged people to ask questions about anything they don’t understand, and while it may seem boring to read the paperwork, you don’t just go on trust.
“It’s your money and your financial decision. The decision rests with you, so you need to understand what’s being recommended and advised to you”, Warren says.ASIC’s Moneysmart website has some beneficial information on how to approach getting financial advice, for example, the process involved, clarification on what you’re trying to achieve before getting advice, how to find a financial adviser, and what fees you will pay. We encourage you to go there as a first step.
Getting Legal Help for Bad Financial Advice
Contact us if you’re questioning the advice you received from a financial advisor and consider taking steps against them. We are committed to ensuring our clients receive the best possible advice and guidance on their situation, especially in financial disputes and bank disputes. You can contact us online, call us at 1300 433 533 or email us at enquiry@fdlegal.com.au.
