Invest
Questions to ask investment professionals before choosing an adviser
A person can grow their wealth more effectively and fight the effects of inflation by investing their money, but portfolio management can be difficult for inexperienced investors. Engaging a licensed investment professional can help them mitigate investment risks. Choosing the right person, however, requires careful evaluation.
Questions to ask investment professionals before choosing an adviser
Investors need to prepare questions to ask a financial planner to find the right investment professional who can help manage their investments according to their objectives and goals.
Nest Egg provides a guide on what to ask investment professionals in an interview in order to determine if they’re the right person to hire.
Evaluate your purpose for investing
Before consulting a professional, consider evaluating your investment objective because this will help narrow down the list of potential advisers.
Answer this: What is this investment for?
Before searching for an adviser or broker, clarify your purpose for the investment and identify your time horizon and risk tolerance.
Knowing the underlying reason for the intended investment may help determine the kind of advice needed and direct you to investment professionals who could potentially help meet those objectives.
Likewise, be clear about your requirements and expectations from a financial manager so that the potential advisers you will interview will have a clear idea about the kind of service they are required to provide.
Important questions to ask investment professionals
The first meeting with a stock broker, financial planner or adviser should ideally be an informative exchange.
Don’t be afraid or embarrassed to ask the investment professional to explain whatever areas you have difficulty understanding. Refrain from signing any document or employing the professional without receiving satisfactory and understandable responses to all your questions.
Consider inquiring about the following:
- Credentials and Australian financial services (AFS) licence
- Experience
- Products
- Services
- Fees
Credentials and AFS licence
Ask the investment professional about their credentials and if they have an AFS licence.
Although a degree in accounting, finance, economics or financial planning are preferable, the professional doesn’t have to own a diploma on these disciplines. Rather, they should be able to show that they took steps to learn the ropes and have the qualifications to give financial and investment advice.
Any individual who gives investment recommendations, whether they are compensated or not, must have an AFS licence. This licence will allow you to confirm the legitimacy of their operation.
Experience
Ask about the financial adviser’s previous experiences and clientele. This should give you an idea if the adviser has experience dealing with people who share similar circumstances. Likewise, it may help you discern if the adviser can truly understand your objectives and can provide appropriate advice.
Products
It’s best to know what type of products the adviser can offer so you will know their investment limitations. Likewise, the adviser should be able to explain how a recommended product works and its role in the strategy for your portfolio.
This is important because some advisers may recommend switching to a different product that they receive commissions from, which could be a conflict of interest at the expense of the investor.
Services
Ask about the extent of services that the adviser provides and whether they have the appropriate licence to extend those services.
The adviser should also be upfront about the limitations of their advisory function so that you will not expect a personalised recommendation if they are only licensed to give general advice.
Fees
Recurring fees can negatively impact or neutralise the growth of an investment portfolio, which is why it’s important for you to be frank and ask about the adviser’s fees in percentage and dollar amount.
Consult the financial advisers register
Once you know the name and AFS licence number of the adviser, the Australian Securities and Investments Commission (ASIC) recommends consulting the financial advisers register to learn their details, such as their credentials, experiences, professional associations and approved product list, among other qualifications.
This information has been sourced from ASIC and FINRA.
RELATED ARTICLES
About the author
About the author
Property
New investment platform Arkus allows Australians to invest in property for just $1
In a groundbreaking move to democratise investment in property-backed mortgage funds, GPS Investment Fund Limited has launched Arkus™, a retail investment platform designed to make investing ...Read more
Property
Help to Buy goes live: What 40,000 new buyers mean for banks, builders and the bottom line
Australia’s Help to Buy has opened, lowering the deposit hurdle to 2 per cent and aiming to support up to 40,000 households over four years. That single policy lever will reverberate through mortgage ...Read more
Property
Australia’s mortgage knife‑fight: investors, first‑home buyers and the new rules of lender competition
The mortgage market is staying hot even as rate relief remains elusive, with investors and first‑home buyers chasing scarce stock and lenders fighting for share on price, speed and digital experienceRead more
Property
Breaking Australia’s three‑property ceiling: the finance‑first playbook for scalable portfolios
Most Australian investors don’t stall at three properties because they run out of ambition — they run out of borrowing capacity. The ceiling is a finance constraint disguised as an asset problem. The ...Read more
Property
Gen Z's secret weapon: Why their homebuying spree could flip Australia's housing market
A surprising share of younger Australians are preparing to buy despite affordability headwinds. One in three Gen Z Australians intend to purchase within a few years and 32 per cent say escaping rent ...Read more
Property
Tasmania’s pet-positive pivot: What landlords, BTR operators and insurers need to do now
Tasmania will soon require landlords to allow pets unless they can prove a valid reason to refuse. This is more than a tenancy tweak; it is a structural signal that the balance of power in rental ...Read more
Property
NSW underquoting crackdown: the compliance reset creating both cost and competitive edge
NSW is moving to sharply increase penalties for misleading price guides, including fines linked to agent commissions and maximum penalties up to $110,000. Behind the headlines sits a more ...Read more
Property
ANZ’s mortgage growth, profit slump: why volume without margin won’t pay the dividends
ANZ lifted home-lending volumes, yet profits fell under the weight of regulatory and restructuring costs—an object lesson in the futility of growth that doesn’t convert to margin and productivityRead more
Property
New investment platform Arkus allows Australians to invest in property for just $1
In a groundbreaking move to democratise investment in property-backed mortgage funds, GPS Investment Fund Limited has launched Arkus™, a retail investment platform designed to make investing ...Read more
Property
Help to Buy goes live: What 40,000 new buyers mean for banks, builders and the bottom line
Australia’s Help to Buy has opened, lowering the deposit hurdle to 2 per cent and aiming to support up to 40,000 households over four years. That single policy lever will reverberate through mortgage ...Read more
Property
Australia’s mortgage knife‑fight: investors, first‑home buyers and the new rules of lender competition
The mortgage market is staying hot even as rate relief remains elusive, with investors and first‑home buyers chasing scarce stock and lenders fighting for share on price, speed and digital experienceRead more
Property
Breaking Australia’s three‑property ceiling: the finance‑first playbook for scalable portfolios
Most Australian investors don’t stall at three properties because they run out of ambition — they run out of borrowing capacity. The ceiling is a finance constraint disguised as an asset problem. The ...Read more
Property
Gen Z's secret weapon: Why their homebuying spree could flip Australia's housing market
A surprising share of younger Australians are preparing to buy despite affordability headwinds. One in three Gen Z Australians intend to purchase within a few years and 32 per cent say escaping rent ...Read more
Property
Tasmania’s pet-positive pivot: What landlords, BTR operators and insurers need to do now
Tasmania will soon require landlords to allow pets unless they can prove a valid reason to refuse. This is more than a tenancy tweak; it is a structural signal that the balance of power in rental ...Read more
Property
NSW underquoting crackdown: the compliance reset creating both cost and competitive edge
NSW is moving to sharply increase penalties for misleading price guides, including fines linked to agent commissions and maximum penalties up to $110,000. Behind the headlines sits a more ...Read more
Property
ANZ’s mortgage growth, profit slump: why volume without margin won’t pay the dividends
ANZ lifted home-lending volumes, yet profits fell under the weight of regulatory and restructuring costs—an object lesson in the futility of growth that doesn’t convert to margin and productivityRead more
