7 Questions To Ask A Financial Planner Before You Hand Over A Single Dollar

A first meeting with a financial planner can feel reassuring.

The office looks professional. The presentation is polished. The planner speaks confidently about retirement, investment markets and financial freedom.

None of that tells you what the relationship will cost, how recommendations are selected or what happens when the advice goes wrong.

According to my research, Australians should check more than qualifications and personality before paying for personal financial advice. Registration, authorised advice areas, fees, product relationships and the promised service all deserve attention.

Seven direct questions can expose most of the problems before money changes hands.

From my experience reviewing financial-planning agreements, vague answers at the first meeting rarely become clearer after the contract is signed. A capable planner should welcome careful questions and explain the answers in language you understand.

General information only: This article explains how to interview a financial planner in Australia. It does not recommend a particular adviser, strategy or financial product. Check current registration details and obtain advice that considers your personal circumstances before acting.

Prepare before the first meeting

You will get better answers when the planner understands what you need.

Write down the financial decision that led you to book the meeting.

It may be:

• Can I afford to retire within five years?
• Should I pay down debt or invest more?
• How should I manage an inheritance?
• Do my super and investments suit the same goal?
• Am I paying too much for financial products?
• What should change after marriage, separation or a new child?
• Do I need one-off advice or an ongoing service?

Bring recent statements for super, investments, loans and insurance. Include a rough household budget and a list of goals.

Do not provide account passwords. Statements should be enough for the first discussion.

When you are still deciding if professional advice is necessary, read the moment you know it is time to hire a financial planner before committing to a full planning package.

Question 1: Are you registered and authorised to give the advice I need?

This question comes first because a professional title does not prove authority to provide personal financial advice.

Ask for the planner’s:

• Full professional name.
• Adviser registration number.
• Australian financial services licensee.
• Current business name.
• Authorised advice areas.

Then check the individual, not merely the firm.

The Financial Advisers Register can show information about a registered adviser’s status, qualifications, work history and authorised financial-product areas.

A planner may be authorised to discuss superannuation, investments and life insurance but unable to provide every form of tax, credit, legal or property advice.

Ask a follow-up question:

Which part of my situation falls outside your authorisation?

A good planner should answer without trying to make their service sound broader than it is.

Registration is a starting point

Being registered does not prove that a planner is experienced with your problem. It confirms something narrower: the person is recorded as authorised to provide certain personal financial advice.

You still need to examine experience, fees and the planning process.

Ask how often the planner works with people at your stage of life.

Someone who mainly advises retirees may not suit a young business owner. A planner focused on investment portfolios may have limited experience with debt management or family cash flow.

Red flags

• The person refuses to provide their full name or registration details.
• The firm is registered, but the individual giving the advice cannot be identified.
• The planner claims registration is unnecessary for the personal financial advice being discussed.
• The planner gives tax, legal or credit opinions without explaining the limits of their service.
• You are asked to rely on qualifications instead of checking current authorisation.

Professional qualifications can still tell you something about training. Our guide to Australian financial-planner certification requirements explains how a professional designation differs from legal authorisation.

Question 2: What exactly will you do for me?

“Financial planning” can describe several different services.

One planner may prepare a retirement projection. Another may manage investments. A third may review cash flow, debt, super, insurance, tax considerations and estate-planning needs.

Do not assume the service includes everything discussed during the meeting.

Ask for a written scope covering:

• The financial questions being addressed.
• The information the planner will review.
• The recommendations you will receive.
• The products or accounts included.
• Anything excluded from the advice.
• Who will implement the recommendations.
• How long the work should take.
• Which other professionals may be required.

A narrow advice engagement can be perfectly suitable.

For example, you may need help deciding how to invest a redundancy payment. You may not need a complete review of every insurance policy, estate document and household expense.

The problem appears when you pay for a broad service and receive a narrow product recommendation.

Ask what is excluded

This follow-up question often reveals more than asking what is included:

Which financial issues will you see but not advise me on?

The planner may identify tax, legal, lending or estate matters that need another professional.

That is not a weakness. It shows the boundaries of the service.

It becomes a concern when an excluded issue could materially affect the recommendation and nobody has been asked to review it.

For instance, an investment sale may create tax consequences. A super strategy may affect access to cash. A property purchase may involve lending and legal questions.

The plan needs to acknowledge those connections.

Ask who does the work

The person conducting the first meeting may not prepare every part of the advice.

Ask:

• Who gathers and checks my information?
• Who prepares the recommendations?
• Who reviews the advice before I receive it?
• Who will answer questions after the meeting?
• Will I continue dealing with the same planner?

A team-based process can work well. You should still know who is responsible.

Our article on what a financial planner actually does explains the work that can happen between the first meeting and the final recommendation.

Question 3: What will I pay in the first year and every year after that?

Do not settle for a percentage or a statement that the fee will be “disclosed later”.

Ask for the likely total in dollars.

Possible costs include:

• An initial consultation fee.
• A strategy or advice-preparation fee.
• An implementation fee.
• An ongoing monthly or annual advice fee.
• A percentage charged on assets.
• Investment-management fees.
• Platform or administration costs.
• Insurance premiums.
• Transaction costs.

The advice fee may be only one layer.

A planner could charge $4,000 for advice and recommend a product carrying separate administration and investment costs. Those product costs may continue even after the advice relationship ends.

Convert percentages into dollars

Percentage fees look small until they are applied to the account balance.

Our data shows the arithmetic behind the fee rather than judging whether the service is worth the cost.

A higher fee may be reasonable when the planner provides substantial work that you need. A lower fee can still be poor value when the service consists of one brief review and a generic report.

Ask what happens as the balance grows

A percentage-based fee can rise even when the annual service remains the same.

Ask:

• Is the percentage applied to every asset?
• Are cash and super included?
• Does the fee have a dollar cap?
• Will I pay more after contributing additional money?
• Does the planner charge on assets they do not actively manage?
• Could I pay a fixed fee instead?

Read the real cost of hiring a financial planner in Australia before comparing quotes that use different fee models.

Ongoing fees require ongoing work

Ask the planner to list the services provided each year.

You should know when each service occurs and who provides it.

A recurring charge should not continue merely because the original advice was useful several years ago.

Question 4: How are you paid, and who else benefits from your recommendation?

The planner’s invoice may not show every financial interest connected with the advice.

Ask about:

• Insurance commissions.
• Referral payments.
• Product-provider relationships.
• Platform ownership or commercial links.
• Bonuses connected with sales or asset growth.
• Payments from accountants, brokers, lawyers or property businesses.

A conflict does not automatically prove that the advice is unsuitable.

It does mean you need to understand how the planner and related businesses are paid.

Ask directly:

Will you or your business receive any financial benefit if I follow this recommendation?

Then ask:

Would your recommendation change if that payment did not exist?

The answer should be clear enough to repeat in your own words.

Fee-only does not remove every conflict

A planner who receives no product commission may still face incentives.

A fee based on assets can encourage money to remain invested through the planner’s preferred service rather than being used to reduce debt.

An ongoing fee can encourage the relationship to continue after the client’s needs become simpler.

A fixed-fee planner may have an incentive to keep the work within a tight scope.

Every model has trade-offs.

The aim is not to find a business with no financial incentives. It is to understand the incentives before deciding if the arrangement suits you.

Read the Financial Services Guide

Ask for the planner’s Financial Services Guide before agreeing to paid work.

It should explain the services offered, the business and licensee involved, payment arrangements, relevant product links and complaint procedures.

Do not treat it as paperwork to accept without reading.

If the guide and the planner’s verbal explanation appear inconsistent, ask for written clarification.

Question 5: Why is this strategy suitable for me, and what alternatives did you reject?

A recommendation should begin with your circumstances.

It should not begin with a product the planner already intended to sell.

Ask the planner to explain:

• The financial problem being solved.
• The assumptions used.
• The expected benefit.
• The main risks.
• The total cost.
• The effect on access to money.
• The alternatives considered.
• What you could lose by changing from existing arrangements.

A recommendation to move investments or super should compare the proposed product with what you already hold.

The comparison may include fees, investment choice, insurance, tax consequences, administration and exit arrangements.

Ask the “do nothing” question

What happens if I make no change?

This question exposes weak recommendations quickly.

The planner should explain the likely cost, risk or missed opportunity of keeping the current arrangement.

If doing nothing remains a reasonable option, that should be stated.

Advice becomes less credible when every discussion ends with a new product.

Ask which alternatives were considered

A planner recommending investments should be able to explain why other approaches were not selected.

Alternatives might include:

• Paying down debt.
• Keeping more cash available.
• Using your existing investment account.
• Changing the investment option without changing the provider.
• Making no immediate change.
• Seeking advice on one narrow issue.
• Using a lower-cost automated service.

Our comparison of robo advisors and financial planners shows why full personal advice may be useful for connected decisions but excessive for a straightforward investment account.

Ask about the worst reasonable outcome

Expected returns are easy to discuss.

Ask what could go wrong.

• How far might the investment fall?
• How long could recovery take?
• What happens if income drops?
• Could fees rise?
• Will the strategy restrict access to cash?
• Could insurance be lost?
• What happens after a change in tax or family circumstances?

A planner who explains uncertainty is more useful than one who pretends uncertainty can be removed.

Question 6: How will we measure progress?

Investment performance is only one measure.

A financial plan may also aim to reduce debt, increase retirement savings, improve cash reserves, organise insurance or fund a future expense.

Ask the planner to define success in practical terms.

Possible measures include:

• Emergency savings reaching a set amount.
• High-interest debt being cleared by a target date.
• Retirement contributions increasing to an agreed level.
• The investment portfolio remaining within its intended risk range.
• Insurance gaps being resolved.
• Annual spending staying within the retirement plan.
• Estate documents and beneficiaries being reviewed.

Targets should connect with the reason you hired the planner.

If your goal is to retire at 60, a quarterly investment return does not answer the main question. You need to know whether savings, spending and retirement-income assumptions remain on track.

Ask which benchmarks will be used

A planner should not claim success merely because an account balance increased during a strong market.

Investment performance needs to be considered against:

• The portfolio’s intended risk level.
• A suitable market benchmark.
• Fees and tax.
• Money added or withdrawn.
• The agreed investment period.

Comparing a conservative portfolio with a share-market index can produce a misleading result.

The benchmark should match the strategy.

Ask how often the plan will be reviewed

Review timing depends on the service.

An ongoing engagement may include an annual meeting and contact after major changes. A retirement-income plan may require closer monitoring. One-off advice may end after implementation.

Ask:

• When is the first review?
• What information will be updated?
• Will I receive a written progress report?
• What changes should I report immediately?
• Does another meeting cost extra?
• Who contacts me when a review is due?

Do not pay for “ongoing support” without knowing how that support appears in the calendar.

Question 7: What happens if I leave, you leave or the relationship stops working?

Most people ask how the relationship begins.

Few ask how it ends.

You need to know:

• How ongoing fees can be stopped.
• Which accounts remain open.
• What happens to investments held on a recommended platform.
• Which records you will receive.
• What happens if the planner changes firms.
• Who takes over during illness or extended leave.
• How complaints are handled.

Your investments should not disappear because the planner leaves the business.

The assets are usually held through financial products, custodians or accounts separate from the adviser. Access, fees and service arrangements may still change.

Ask about ongoing fees before leaving the room

Ask how to cancel:

• The advice agreement.
• Automatic bank payments.
• Fees deducted from investments.
• Fees deducted from super.
• Optional investment or administration services.

Get the cancellation process in writing.

Ending the advice relationship may not close the investment product. Product fees may continue until the account itself is changed or closed.

Ask what happens if the planner changes firms

Do not assume you automatically move with them.

Ask:

• Who owns the client relationship?
• Will I be assigned another planner?
• Will my consent be required?
• Will the advice fee change?
• Can I keep the same products without the planner?
• How will my personal information be handled?

A good succession process protects clients from being left without support during a major financial decision.

Ask how complaints work

The planner should explain the firm’s internal complaint process.

You should know:

• Where a complaint is sent.
• Who responds.
• What information to include.
• How unresolved disputes can be taken further.

Keep copies of advice documents, emails, fee agreements and records of instructions.

Verbal assurances are difficult to rely on after a disagreement.

The seven questions at a glance

A simple planner-comparison scorecard

After meeting two or three planners, score each one using the same criteria.

This is not an official industry rating.

It stops one polished presentation or cheap quote from deciding the result.

Do not give points for a large office, expensive lunch or confident market prediction.

Answers that sound good but say very little

Be careful with phrases such as:

• “We take care of everything.”
• “Our fee is competitive.”
• “We only recommend quality products.”
• “The portfolio is designed for long-term growth.”
• “You will always have access to our team.”
• “Most clients choose the ongoing package.”

Each statement needs detail.

What does “everything” include? Competitive with what? Which products were compared? How much risk supports the growth target? Who answers calls? What does the ongoing package provide?

General promises should become written commitments before you pay.

Documents to request before signing

Ask for:

• The Financial Services Guide.
• A written scope of work.
• The initial and ongoing fee schedule.
• A service agreement.
• Information about commissions and referral arrangements.
• The expected advice timetable.
• Cancellation and complaint procedures.

Read the documents away from the meeting.

Do not sign blank forms or approve account transfers you do not understand.

A respectable planner should give you enough time to consider the arrangement.

Cold-call red flags

Be particularly careful when the meeting began with an unsolicited call, message or social-media advertisement.

Warning signs include:

• Pressure to book immediately.
• Claims that your current investments are failing before they are reviewed.
• A free service that requires extensive personal information.
• Requests for myGov, bank or investment passwords.
• Guaranteed returns.
• A product recommendation during the first brief call.
• Refusal to send fees and business details in writing.

Contact the business through details you have checked independently.

Do you need a local or online planner?

The seven questions apply to both.

A local planner may suit people who value office meetings and face-to-face discussions. An online planner can offer wider access to specialised services and reduce travel.

Ask how the planner:

• Conducts meetings.
• Shares confidential documents.
• Verifies identity.
• Responds between appointments.
• Handles technology problems.
• Supports clients who are travelling.

Read our comparison of local and online financial planners before choosing based on location alone.

Take the answers home

You do not need to choose a financial planner during the first meeting.

Take the documents away. Convert percentages into dollars. Compare the service with another provider.

Ask yourself:

• Did the planner understand the problem I wanted solved?
• Could I explain the fee structure to someone else?
• Were the risks discussed as clearly as the possible benefits?
• Did the planner explain their limits?
• Was I given time to decide?
• Did the meeting begin with my goals or a product?

Trust does not need to be instant.

It should grow from clear answers, consistent documents and advice that connects with your actual circumstances.

Hand over information before you hand over control

A financial planner needs accurate information to prepare useful advice.

That does not mean giving away control of your accounts.

Start by sharing statements, goals, income, debts and household spending. Let the planner explain the process, cost and reasoning.

Then decide which recommendations to accept.

The right planner will not be offended by seven careful questions. They will understand why the questions need answering before a single dollar is moved.

Your money may take decades to build.

Spending one meeting checking who will advise on it is time well used.