COSTS VARY, BUT MAKE SURE YOU GET VALUE FOR YOUR MONEY

Luke Smith answers Money’s questions

How do financial planners get paid? What is the fee range?

At your first meeting, your financial planner will talk to you about the fees they charge. The costs for the advice and services they offer are also outlined in a document called a financial services guide (FSG). This will be provided to you by the planner before or at your first meeting.

A survey of the cost of a statement of advice found the average cost was $3315 in 2022 around Australia, but the actual cost will vary from provider to provider.

Of course, the fees you pay will be related to the kind of advice and service and the complexity of advice provided to you. This should be clearly defined and agreed upon before commencing a new arrangement. Additionally, if you have an ongoing service arrangement, your financial planner will provide you with a fee disclosure statement (FSD) every year. The FSD outlines the fees you pay and the services you will receive.

How can you terminate a financial planner if you feel they don’t add value or you’re unhappy with their service?

If you decide you’re not satisfied with the service or value you’re receiving from your financial planner, a good place to start is to talk to them about your experience. If you have an ongoing service arrangement with your financial planner and you want to end the relationship, you should do so by putting your request to them in writing or contacting their office directly requesting that your existing arrangement cease along with any ongoing fees.

What if you have a question that impacts a close family member but not necessarily your own finances directly? Can financial advisers give “modular advice” or charge a fee for specific situations?

If you have a question that impacts a close family member, but not necessarily your own finances directly, a financial planner is able to provide advice. The planner can give advice on a changing situation and limit the advice to a specific area as required. Advice, however, needs to be given directly to the family member affected. Work can be done on a fee-for-service basis or an agreed ongoing fee for the new scope of work depending on the duration. A new fee structure would be agreed that may be outside your existing arrangement and service offering.