Getting the right investment advice

There are no guarantees of good financial advice. But new rules mean anyone who gives investment advice to clients will now have to provide more information up-front.

You can get investment advice from financial planners, insurance companies, sharebrokers, banks, asset managers and independent advisers. Some lawyers and accountants also give investment advice.

When you go to any of these advisers they must now give you a written 'disclosure statement' before they give you any investment advice and before you pay them any money. The information in the disclosure statement will help you decide whether or not to take their advice.

By law, the information in the disclosure statement must answer each of the following six questions about the adviser:

• What are their experience and qualifications?
• Do they have any criminal convictions?
• What types of investment do they advise on?
• What fees do they charge?
• What interests do they have that could influence their advice?
• What relationships do they have that could influence their advice?

And, if they are a sharebroker, do they have any criminal convictions and what are their procedures for dealing with your money?

Deciding where to put your money isn’t something you should rush into, so read the disclosure statement carefully.

It should give you a clear picture of what the adviser can do for you, who they are associated with, what you will pay, and what choices of investment you have.

Shop around and compare the disclosure of several advisers. You may find you need more than one adviser to get the results you want.

For more information, check out the Advice checklist in our Investing section.

Published 10 March 2008