Day 10 of BiG’s 30 Day Bucket List Investing Challenge

GENERAL

How to choose a financial adviser and advice you can trust| Part 2 How do raters rate? Investing rating sites, Top 10…, Best…”?

Can you believe industry testimonials, rating sites, awards and lists “The Top 10, 50, 100″… ? It’s easy to get lost searching the finance and investment industries, comparing the winners, the successful businesses, wealth managers, financial planners, financial advisers, superannuation funds, managed funds, mortgage or insurance brokers and more. But, a warning:

try never to be swayed by lists of this nature… I’m still working hard and won’t stop until I’m on top of the list I most want to occupy: ‘People Who Equipped Me For Success,’ and only you can write that list.

Chris Brogan The Strange Nature of Lists

In Part 1 of this series Day 9 we saw that both quantitative and qualitative data and statistics are important in choosing an adviser or product. But many of these types of rating and review sites focus quantitative data, often ignoring consumer or client satisfaction factors.
If you’re looking for a trusting relationship with your ‘financial doctor’, subjective factors are important’ (says Mark Bouris). 

TIP: Check out people or companies providing personal advice on investments, superannuation and life insurance  on ASIC’s Financial Advisers Register . “Where they’ve worked, their qualifications, training, memberships of professional bodies and products they can advise on.”

Beware: ASIC doesn’t check or review submitted information before putting it on the register.

You can compare, rate and find award winners (often from a provider’s profile and marketing spiel) from industry associations, private and government bodies (see more in Guru Cops), media and publications (see Resources and Giveaways in the BiG Directory) including:

“If you don’t ‘click’ [with them] think twice.

 

Your relationship should never be focused on a one-off transaction but an ongoing series of engagements over many years. This allows them to develop a great understanding of you also. This makes a big difference to the quality of the advice they deliver. Remember advice is more than just data and facts.

Teaming up with a planner is just as much about gut feel and comfort – just like any other relationship
… good planners will also be quietly assessing you to as a fit for their business.”

Mark Bouris

  1. Check out their credentials and experience yourself

For many this just involves word of mouth or phone a friend! If you want to rely on friends, family or acquaintances – up to you. But you can check them out on rating sites (Day 10) and or Day 11 Investing Information Tsunami!

Top-10-financial-advisers

Google the “top 10…” people or influencers in business, management or leadership.

Tip: Treat these type of lists with healthy scepticism

Comparing products and services

As you compare investments and advisers, be careful to compare apples with apples.
MoneySmart Using Comparison Websites warns, such sites have their limitations “such as:

  • Comparison websites are businesses that make money in various ways, sometimes through sponsored or promoted links and commissions
  • Most comparison sites only cover a portion of the market, not the whole market
  • The search results may show sponsored links ahead of non-­sponsored results that may offer a better deal. Ratings and rankings on comparison sites are sometimes given without a clear explanation, so it’s important to find out how the ratings work and compare with other sites.

When using insurance comparison websites be aware that:

  • Some comparison websites have a relationship to the issuer/provider being compared, and this may not be clearly explained.
  • Price is NOT the be all and end­all. Price is only one feature. The most important thing is that you have the right type and level of cover.”

Awards and Ratings

Many of these warnings apply when a provider bases their credibility on an award, review or rating. So check out:

  • What’s the professional status and credibility of the awarding body?
  • How many providers were considered and what was the selection criteria?
  • Were clients surveyed – how and how many?
  • Are there any business, financial or other relationships that may cause any bias?

Referrals and Testimonials

If a provider uses client testimonials, there should be nothing to stop you from contacting the client to substantiate it. (see MoneySmart’s Questions to ask a financial planner).

But the chances are, with so much information for you to wade through, with many of us being time poor, and perhaps not having the courage to follow up on a testimonial or client – you won’t!

But, as with referrals from friends, family and acquaintances at, at least ask yourself:

  • Does the referrer have any biases or vested interest?
  • Are their financial circumstances similar to yours?
  • Will you and your needs ‘fit’ with the provider?

Now you’ve got an insight into where to find people and sites that compare, rate and review investment information. As you’ll see, many of the sites only cover formal or registered financial advice and advisers in the investment, superannuation and insurance industries. But we hope that gives you a useful overview of where to look, and what information is around, to help you make better choices.


Tomorrow Day 11, we take a look at your research options for financial and investing information. As you will find, there are many providers, but also investors themselves, who share their information, knowledge and experience – often for free!

Then Day 12. Having found the comparison, rating and review sites for the more regulated, formal financial planners and advisers – what sort of review and regulation is there on others in the investing industry?

Day 10 Your Task/s:

Answer these:
If you have a financial adviser, or are thinking of using one – are they registered on the ASIC register?
How do their products and services stack up?  How’s their overall performance, awards, ratings, comparisons?
Is your adviser your ‘financial doctor’, or is it time to review, or get another referral?

Next posts:
Day 11 “How to choose a financial adviser and advice you can trust. It’s all about the faith! Part 3 The Investing Information Tsunami! Media, Books, Magazines, Websites, Blogs, Podcasts, Webinars…”

Day 12 “How to choose a financial adviser and advice you can trust. It’s all about the faith! Part 4 Less Regulated Advisers – Analysts, Commentators and Gurus”

I’d love if BiG and my work helps you. Feel free to share it with friends, family and others interested in investing.
All the very best with yours.

Andrea

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