How to find a good financial planner

TRUST in financial planners has been trashed at the banking royal commission, and even happy clients are now unwilling to recommend their advisers to others.

This drop-off in recommendations comes as demand for professional advice is tipped to climb, while new tax, superannuation and investment rules increase Australians’ financial complexity. The financial planning industry has been subdued amid royal commission reports of rip-offs, bad advice and fees charged to dead people.

New research by Investment Trends has found that three-quarters of advice clients are satisfied with their planners but just 30 per cent are highly likely to recommend them, down from 51 per cent last year.

Investment Trends senior analyst King Loong Choi said the royal commission “may have had an impact on people’s willingness to recommend their planner”.

However, about 2.1 million people plan to seek advice in the next two years, up from 1.6 million in 2017, Investment Trends found.

Advice group Enrizen’s executive director, Frank Da Luz, said constant Budget changes and superannuation tweaks confused people.

“The royal commission has painted the industry in a bad light, but it has also brought the issues to the fore, which is an opportunity,” he said.

“Clients are more wary and will be asking more questions. Financial planners will also need to be more transparent, which is beneficial for consumers.”

Kerry Little, a 36-year-old project manager, said she and husband Terrence had benefited from professional advice around cash flow and budgeting, super rollovers, investment properties and insurance.

“I believe there is a whole misconception about what financial advice is,” she said. “People think it’s only for the wealthy.”

RSM national head of financial services Rod Edwards said people choosing a financial adviser should consider how advisers were paid, their fees, qualifications and whether their firm owned financial products.

“If the firm owns financial products such as insurance or loans, there is bound to be a conflict of interest for the adviser,” he said.