Getting good advice

3 adviser heroes

Our panel found 3 plans it rated as “good” – one pre-retirement and two investment plans.

• Warren Corston from Trustees Executors gave good service to his shopper. He found practical solutions for reducing debt, saving for retirement and dealing with insurable risks. The analysis was appropriate and comprehensive, with practical actions identified and specific options compared.
• The investment plan put together by Glenn Wilson of First NZ Capital was appropriate for his shopper’s needs and was well explained. The investment mix was acceptable and probably relatively inexpensive to implement and maintain.
• The investments recommended by Deborah Carlyon of Stuart and Carlyon were good quality and the shopper was (quite rightly for them) not pushed towards a “wrap platform”. Our panel thought the information on risk was excellent. It also liked the clear way costs were explained.

Our 7 tips for getting good advice

• 1. Get prepared by doing some research first. The Retirement Commission has easy-to-follow and comprehensive info for investors and people wanting to plan for their retirement. It's all free - either as booklets or on its website (see 'More information', below).
• 2. Think carefully about the areas you need advice on and check  the adviser will provide advice on these.
• 3. Only use an adviser who relies on payment by the hour (or payment that’s a percentage of your investment). That means one who does not accept commissions and has no other relationship with a financial-services or product provider. A straightforward payment system will usually mean the adviser can give a simple explanation of how they get paid. Advisers like this are hard to find but they do exist. 
• 4. Before agreeing to pay for financial advice, check that you’ll receive a written report – and ask for a sample plan. 
• 5. Look through the sample plan carefully. Does it clearly review the client’s current strategy? Does it clearly explain and compare different options? Does it give clear recommendations? Does it explain why various actions are being recommended? Does it show clearly what the initial and ongoing costs are going to be? No? Then it’s a poor plan … and the chances are your plan will be poor too. 
• 6. Financial advice can be clearly explained. If the sample plan is too complicated for you, don’t go ahead. Keep looking for the right adviser.
• 7. Before acting on a financial plan you’ve bought, check it against the criteria we recommend for sample plans in 5 above. If it doesn’t give our suggested info don’t implement it. The cost of the plan may be money wasted – but at least you won’t waste more by following poor advice.

More information

Retirement Commission:

• Investment advice: www.sorted.org.nz
• Investment calculator: www.sorted.org.nz/calculators/investing
• Investment booklet: www.sorted.org.nz/ordering 0800 767 866

Institute of Financial Advisers: www.ifa.org.nz

Securities Commission: www.seccom.govt.nz