Financial planning is more of an art than a science. There is never a single solution to a problem. It is more a matter of applying a number of fundamental principles to a set of individual circumstances and goals to come up with strategies that support the achievement of those goals. Every person or couple has different circumstances and goals, and so there isn’t a ‘one size fits all’ strategy.

Kiwis have been slow to catch on to the idea that having a financial adviser is an important person to include as part of your ‘professional team’ alongside your lawyer, your accountant and your health professionals.

There are some barriers to people reaching out for advice, mostly created by misperception and lack of knowledge.

Let’s have a look at the most common ones:

It’s true that some investment advisers are only interested in clients with a large sum (over $500,000) to invest. However, there are plenty of advisers who will help you no matter what your circumstances. If your needs are simple, find an adviser who will charge you an hourly rate for advice or a fixed fee for preparing a financial plan. No matter what your circumstances, having a financial plan is always a good idea.

Research in New Zealand and overseas has shown multiple times that those people who use a financial adviser experience superior financial outcomes compared with those who don’t. Shop around for an adviser who charges a reasonable fee for the kind of service you want.

The financial advice profession is heavily regulated now in order to protect consumers. Good advisers generally belong to a professional organisation, and membership comes with obligations to meet professional and ethical standards. Financial Advice New Zealand (www.financialadvice.nz) has a Find an Adviser section on its website where you can find an adviser in your area.

Following recent legislative changes, the term financial adviser now covers a wide range of different types of advice – insurance, mortgages, investments and financial planning.  All financial advisers must be registered and all must be associated with a Financial Advice Provider (FAP). Financial advisers may give advice only in areas in which they are competent. Find an adviser who is competent in the areas in which you need help. Every adviser must give you a disclosure document that sets out the services and products they can advise on.

You can also ask for the disclosure document for the Financial Advice Provider with whom the adviser is associated. This will give you more information about fees as well as any conflicts of interest or commissions earned by the FAP. Investment advisers mostly earn their income by way of fees rather than commissions.

Advisers are often asked if their advice is independent. This is a difficult question to answer and in reality, is neither practical nor desirable for advisers to be truly independent. Most investment advisers use a platform, that is, a software system, which manages all the administration involved with a portfolio, including the purchase and sale of assets, quarterly reporting and taxation reports. There are a relatively small number of platforms available in New Zealand. While all are capable of dealing with a very wide range of investments, most restrict their offerings to an Approved Product List (APL). The APL is usually selected by an investment committee after vigorous research. Some advisers prefer to generate their own APL based on their own or independent research. In all cases, the APL will be a diverse range of products, carefully selected. It could be argued that putting together a portfolio from an APL shows a lack of independence. In reality, it is one way in which advisers add value to clients through research and careful selection.

Most advisers will offer an initial meeting at no cost or obligation, so talk to a few and find one who you feel you can establish a good relationship with.