Choosing a Financial Adviser

In New Zealand, financial advisers must meet standards set by the Financial Markets Authority (FMA). Since the Financial Services Legislation Amendment Act 2019 came into effect: **All financial advisers must:** - Be registered on the Financial Service Providers Register (FSPR) - Hold a relevant qualification (typically a Level 5 NZ Certificate in Financial Services or equivalent) - Meet competency standards for the advice they give - Adhere to the Code of Professional Conduct for Financial Advice Services **Additional qualifications to look for:** - **Certified Financial Planner (CFP)** — The gold standard internationally, requiring extensive education, experience, and ethics commitments - **Chartered Financial Analyst (CFA)** — Focused on investment analysis - **Authorised Financial Adviser (AFA) legacy** — Pre-2021 designation indicating advanced qualification **How to verify:** Check the FMA's Financial Service Providers Register at fsp-register.companiesoffice.govt.nz to confirm an adviser is properly registered and licensed.

Financial adviser fees in New Zealand vary depending on the type of advice and fee structure: **Fee structures:** - **Fee-for-service:** You pay directly for advice. Initial plans typically $1,000-$5,000+. Ongoing reviews $500-$2,000/year. - **Commission-based:** The adviser receives commission from product providers (insurance, KiwiSaver, investments). No direct cost to you, but the adviser may be incentivised toward certain products. - **Percentage of assets:** Common for investment management. Typically 0.5%-1.5% of assets under management annually. - **Hybrid:** A combination of fees and commissions. **What you get:** - Initial consultation: Often free (30-60 minutes) - Comprehensive financial plan: $2,000-$5,000 - Ongoing relationship: $1,000-$3,000/year - Single-issue advice (e.g., KiwiSaver review): $300-$800 **Important:** Advisers must disclose their fee structure upfront. Ask about this in your initial meeting so there are no surprises.

In practice, the terms are often used interchangeably in New Zealand, but there are distinctions: **Financial adviser** is the broad term for anyone licensed to provide financial advice. This includes insurance advisers, mortgage brokers, investment advisers, and KiwiSaver specialists. **Financial planner** typically refers to an adviser who takes a holistic, comprehensive approach — looking at your entire financial picture including budgeting, debt, insurance, investments, retirement planning, estate planning, and tax efficiency. **Key distinction:** A financial adviser might help you with one specific area (e.g., choosing insurance), while a financial planner develops a comprehensive plan covering multiple aspects of your financial life. **Certified Financial Planner (CFP)** is a specific designation that requires advanced qualifications and ongoing professional development. Not all financial advisers hold this designation. When seeking help, be clear about whether you need specific advice (one area) or comprehensive planning (whole financial picture).

Your first meeting (often a free consultation) is as much about you evaluating the adviser as them understanding your needs. Key questions: **About their practice:** 1. What are your qualifications and how long have you been advising? 2. What areas do you specialise in? 3. How do you charge for your services? (fee, commission, or hybrid) 4. How many clients do you currently manage? 5. Can you provide references from existing clients? **About how they work:** 6. How often would we meet or review my plan? 7. How do you communicate — email, phone, in-person, video? 8. What happens if I want to end our relationship? 9. Are you independent or tied to specific product providers? 10. Who handles my account if you're unavailable? **About your situation:** 11. Based on what I've told you, what do you see as my priorities? 12. What information do you need from me to get started? **Red flags:** Be cautious of advisers who pressure you to sign up immediately, guarantee specific returns, or are unwilling to explain their fees clearly.

This distinction matters because it affects the range of products an adviser can offer you: **Independent advisers** are not contractually linked to any particular product provider. They can recommend products from across the entire market and should select those that best suit your needs. **Tied or aligned advisers** have a relationship with one or more specific product providers. They may only recommend products from those providers, which means you might not be offered the best option available in the market. **Neither is inherently better or worse.** A tied adviser with deep expertise in their provider's products may serve you well. An independent adviser offers broader choice but may not have the same depth of knowledge about every product. **What to look for:** Ask the adviser directly whether they're independent or aligned, and if aligned, which providers they work with. By law, they must disclose this.

Not everyone needs a financial adviser, but most people benefit from professional guidance at some point. Consider seeking advice if: **You likely need an adviser if:** - You have a complex financial situation (multiple income sources, property, business) - You're approaching a major life event (marriage, divorce, inheritance, redundancy, retirement) - You have significant assets to manage ($100,000+) - You need insurance and aren't sure what or how much - You're self-employed and need to manage your own retirement planning **You might not need one if:** - Your finances are straightforward (steady salary, default KiwiSaver, renting) - You're financially literate and enjoy managing your own investments - You have minimal assets or debts to manage **The middle ground:** Even if you manage day-to-day finances yourself, a one-off consultation for a financial health check can identify blind spots or opportunities you hadn't considered. Our "Do I Need an Adviser?" assessment tool can help you evaluate whether professional guidance would benefit your situation.

In New Zealand, all financial advisers must be registered on the Financial Service Providers Register (FSPR). Here's how to check: **Step 1:** Visit the Companies Office FSPR at fsp-register.companiesoffice.govt.nz **Step 2:** Search by the adviser's name or their company name **Step 3:** Check that their registration is current (not expired or deregistered) **Step 4:** Verify the services they're registered to provide match the advice they're offering you **Also check:** The FMA's warning list at fma.govt.nz for any advisers or companies that have been warned or sanctioned. **What registration means:** A registered adviser has met minimum qualification standards, adheres to the Code of Professional Conduct, and has appropriate dispute resolution arrangements in place. **What it doesn't mean:** Registration alone doesn't guarantee quality of advice. Look at qualifications, experience, client reviews, and your personal comfort level as well.

Yes, absolutely. You're not locked into a relationship with a financial adviser. If you're not satisfied, you can switch at any time. **How to switch:** 1. Review any agreement you signed for notice periods or exit terms 2. Request copies of your financial plan and any product documentation 3. Choose a new adviser and inform them you're transferring 4. Notify your current adviser in writing that you're ending the relationship 5. Ensure any ongoing product management is transferred properly **Your products stay with you:** If your adviser set up insurance, investments, or KiwiSaver, those products don't disappear when you change advisers. A new adviser can take over management of existing products. **When to consider switching:** - You're not hearing from your adviser regularly - Your circumstances have changed and they haven't adjusted your plan - You don't understand the advice being given - Fee increases without clear explanation - You've lost confidence in their recommendations

A Statement of Advice (or written advice record) is a document your financial adviser provides that outlines the advice they've given you and why. Since the 2021 regulatory changes, advisers must provide clear records of their advice. **What it should include:** - A summary of your goals and financial situation as discussed - The advice given and the reasoning behind it - Any products recommended and why - Risks and limitations of the recommended approach - The adviser's fees and any commissions they'll receive - Disclosure of any conflicts of interest **Why it matters:** This document protects both you and the adviser. If something goes wrong, it provides a record of what was discussed and recommended. It also helps you compare advice from different advisers. **Keep it:** Store this document safely. You may need it for future reference, when reviewing your plan, or if you ever need to make a complaint.

If you believe you've received poor financial advice, you have several options: **Step 1 — Raise it with your adviser:** Often, concerns can be resolved directly. Your adviser may have a reasonable explanation or may acknowledge and correct the issue. **Step 2 — Formal complaint to the firm:** If your adviser works for a company, lodge a formal complaint through their internal complaints process. They must have one. **Step 3 — Dispute resolution scheme:** All financial advisers must belong to an approved dispute resolution scheme (either Financial Services Complaints Limited or the Insurance & Financial Services Ombudsman). These services are free for consumers and can award compensation. **Step 4 — FMA complaint:** If you believe the adviser has breached their legal obligations, you can report them to the Financial Markets Authority. **Step 5 — Legal action:** For significant losses, you may consider legal action, though this should be a last resort. **Time limits apply:** Don't delay if you think you've received bad advice. Most dispute resolution schemes have time limits for lodging complaints.

With video conferencing now standard practice, location matters less than it used to. However, there are pros and cons: **Benefits of a local adviser:** - Face-to-face meetings can build stronger trust - Local knowledge of property markets, regional economic conditions - Easier to meet for document signing or urgent discussions - Community reputation is visible and verifiable **Benefits of looking beyond your area:** - Access to specialists who may not be available locally - Wider choice of fee structures and approaches - Many advisers now offer excellent remote service via video calls **What matters more than location:** - Relevant qualifications and experience - Specialisation in your area of need - Compatible communication style - Transparent fee structure - Good client reviews Our directory lets you search by location and by service type, so you can compare local options and specialists further afield.

The frequency depends on your situation complexity and the stage of your advisory relationship: **Initial phase (first 3-6 months):** - 2-3 meetings to establish your plan - First meeting: Understanding your goals and situation - Second meeting: Presenting recommendations - Third meeting: Implementing the plan **Ongoing relationship:** - **Annual review:** At minimum, a comprehensive review of your plan, investments, and goals once per year - **Six-monthly check-ins:** Recommended for more complex situations or active investment management - **Ad-hoc meetings:** When life events occur (new job, marriage, inheritance, health changes) **Between meetings:** A good adviser should be accessible by phone or email for questions. You shouldn't feel like you can only discuss things at scheduled reviews. **Red flag:** If your adviser never contacts you between annual reviews or seems reluctant to meet when requested, consider whether the relationship is serving your needs.