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Home / Retirement planning / Seeking financial advice / 8 warning signs of a dodgy financial adviser

8 warning signs of a dodgy financial adviser

Barbara DruryBarbara Drury

Choosing a financial adviser is an important decision that can have major consequences. If you pick a good one, they can help set you up for long-term wealth and wellbeing. Pick a bad one, and you could lose some or all of your life savings.

We’ve all seen the horror stories and while they are relatively rare, it pays to be vigilant and identify warning signs that your adviser may not be acting in your interests. Or that you should not sign up with an adviser in the first place.

ASIC Financial Advisers’ Register

Fortunately, there are systems in place to help protect consumers. Financial advisers in Australia must either be licensed by the Australian Securities and Investments Commission (ASIC) or be an authorised representative of an Australian Financial Services Licence (AFSL) holder (such as a registered company).

About the author

Barbara Drury
Barbara Drury
Barbara is a financial journalist and author with over 30 years’ experience in Australia and the UK. She is a contributor to The Sydney Morning Herald and The Age Money section, and has worked for the Australian Financial Review and The Australian. Barbara is the author of Alan Kohler’s Eureka Report Guide to Personal Investing, Sorting Out Your Finances for Dummies and Personal Finance for Dummies and co-author of Investing for Dummies with James Kirby.
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Responses

  1. Scott O'Donnell Avatar
    Scott O’Donnell

    Melissa Caddick was not a financial planner. If someone is not on the ASIC Financial Planner register they are not a “naughty financial planner”, they are someone committing a fraud.

  2. Christoph Schnelle Avatar
    Christoph Schnelle

    Wow! I agree that these borderline or actual criminal behaviours are completely unacceptable.

    There are other warning signs:

    An adviser who gets impatient when you ask questions, especially probing questions.
    An adviser who tells you they know better than you. Nobody knows your situation better than you do.
    An adviser who can’t explain to you why they recommend what they recommend.
    An adviser who can explain why they recommend what they recommend but use platitudes.
    An adviser who asks you to leave it to them, you don’t need to worry.
    An adviser who is condescending or reactive to one or both members of a couple.
    An adviser who works for a product provider and recommends an in-house product – be aware that a number of financial planning networks are ultimately owned by a larger operator. You can easily find the ultimate owner by googling and also the provider of the recommended products.
    Also, not every adviser is for every client and vice versa. The adviser may be excellent but you may prefer somebody else.

    Warm Regards,

    Dr Christoph Schnelle

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