The Financial Advisers Act is likely to be implemented by the end of 2010, setting defined operating standards for financial advisers. In the meantime, here are some tips for consumers when seeking financial advice or engaging a financial adviser. See Tips for consumers

The Act aims to ensure consumers can have confidence when they deal with a financial adviser that that person is professional and meets appropriate standards of competence.

The law will require all financial advisers to register. The register will be publicly available on the Companies Office website so consumers can check they are dealing with an adviser who complies with the law.

When implemented the law will regulate all individuals who are financial advisers or, in some cases, the businesses that employ them.

Financial advisers providing advice on investments such as shares, managed funds and futures will need to have minimum qualifications and meet professional standards.

In the meantime consumers are encouraged to check out advisers before engaging them. The tips detailed below will assist this process.

Tips for consumers

Ask these three questions to assist you to select a financial adviser:

Who is the adviser?
Do they belong to a professional adviser association? What qualifications and experience do they have? Do they work for themselves or for an organisation?

How is the adviser paid?
Will you be charged fees? Will commissions be deducted from the money you invest? Can the adviser tell you what the maximum is that you will pay - directly or indirectly - for the advice. Will the adviser get any other form of payment or remuneration - whether in cash or another form?

What services does your adviser offer?
Does your adviser specialize in offering the products or services you are looking for? Has the adviser asked you questions that make you comfortable they properly understand your needs? Will the adviser put details of the advice, and answers to your questions in writing for you?

Answers from an adviser to these questions will help you decide if the adviser has the skills and experience necessary to assist you.

For more information on how to choose a financial adviser you can click on this link to a Securities Commission brochure on Choosing an investment adviser.

A register of financial service providers
In late 2010 a public register will be available listing financial advisers. Consumers can then check whether the adviser they consult is registered and the nature of the advice they are registered to provide.

Disclosure regime and regulatory supervision
Under the Act the Securities Commission becomes the regulator for financial advisers. It will supervise the sector and take action to promote compliance with financial adviser law.

A complaints and disputes process
There will be a disputes resolution process established as well as a process for handling complaints.

FINANCIAL ADVICE Information for consumers

FINANCIAL ADVICE
Information for consumers