RECENTLY ASIC released the results of its latest shadow shopping research project, which found that 61 per cent of the examples were adequate and 39 per cent were poor.
It is interesting that 86 pet cent of the participants rated the quality of the advice as "good", and 81 per cent said they would "trust it - a lot".
As ASIC Commissioner Peter Kell pointed out "a key finding…is that it is difficult for consumers to objectively judge the financial advice they receive, and they do not know where or how to shop around to find the best advisers".
He is spot on. One of the main reasons for this problem is that people tend not to seek financial advice until they are ready to retire.
As I have stressed repeatedly there are good reasons to start a relationship with an adviser at an early an age as possible. It not only enables you to put quality assets working for you when you are young to maximise the power of compounding, it also gives you valuable experience in the way the various asset classes work. And, of course, if the adviser is not right for you, you will find out sooner.
This leaves us with the age old question "how do I find a good adviser?" and the answer is that it is really no different from finding a doctor, dentist or motor mechanic. Recommendations from friends, and reputation in the industry, are good ways to start and I also suggest you choose someone who is a member of the appropriate professional organisation. In our industry the main body is the Financial Planning Association of Australia (FPA).
The financial service industry is a dynamic one and products, markets and regulations are changing continually. This is why it's important to have a follow-up meeting at least once a year to ensure you are on track to reach your goals, and to make changes where appropriate.
Naturally doing this will not guarantee financial success, but it will certainly give you an edge over the majority of Australians who don't get around to seeking financial advice until they are close to retirement.
Noel Whittaker is a co-founder of Whittaker Macnaught Pty Ltd. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. His email is email@example.com.