A NZ financial adviser can help you achieve financial stability, acting as a friendly guide to help you understand your opportunities. With their help, you can stay confident with your money and improve your future and the future of your loved ones. However, when choosing your professional help, you’ll be faced with a big decision: should you choose an independent financial adviser?
In New Zealand, most financial advisers are paid by a larger company to sell their products. Unfortunately, this is a common practice and could lead to you receiving biassed advice that isn’t quite right for your situation.
What Can You Expect From A Company-Paid Financial Adviser?
Although financial advisers must tell you about any commissions or bonuses they get from their company, this doesn’t mean they’ll be unbiased when they help you. When an adviser is paid by someone else to promote or sell their products, that adviser has an inherent conflict of interest.
Even if they disclose their conflicts of interest, there may still be underlying issues, such as:
Unlike independent financial advisers, these financial advisers may be biased in their advice due to their obligations to their employers.
The adviser’s recommendations may be unduly influenced by the commissions or perks they can earn from following their employer’s ‘party line.’
The adviser may be tempted to over-sell their products or services to benefit themselves rather than choosing a good fit for you.
The adviser is likely to be well-trained in their employer’s products rather than the broader offerings of the marketplace that might best suit your circumstances. This could lead to them promoting subpar solutions they’re familiar with rather than finding perfect solutions that fit your circumstances better.
When these conflicts are well-managed, there is still a perception problem where the adviser’s client is suspicious that their adviser’s conflicts of interest taint the advice they receive. This could lead to a weakened adviser-client relationship, causing the client to mistrust their adviser enough to disregard their help entirely.
What Can You Expect From An Independent Financial Adviser?
The above points may be troubling, as you deserve financial help tailored to your needs, rather than from a commission based adviser who doesn’t know you or your situation. Luckily, there’s a fantastic solution - consider working with an independent adviser, like me, David Smart.
Doing so has many advantages such as:
Independent advisers are typically self-employed or have a large ownership in an advisory firm. This means that they are not answerable to external shareholders and, therefore, are not compromised by corporate arrangements and profitability targets of any external shareholders. Essentially, they have no other obligations to push you in one way or another; they’ll simply take your situation into account and consider what’s best for you as an individual.
Independent financial advisers do not pressure clients into buying certain products just to get a commission or meet their employers’ sales targets. There’s absolutely no reason for them to pressure you to pick one solution over another for biased reasons, so you can trust them to have your best interests in mind.
Independent advisers can be more objective because their employers’ ‘house view' does not restrict them, but rather they can focus more broadly on the wider marketplace.
Independent financial advisers are more likely to give personalised, tailored advice that best suits your specific situation, financial objectives and risk profiles. This is extremely important because peoples’ financial situations and goals can differ, and you need advice that suits your needs. For this reason, it’s important to do your own research when finding your financial adviser.
Independent financial advisers are less likely to offer generic, ‘cookie cutter’ solutions that are often favoured by larger firms that are more interested in efficiencies designed to maximise shareholder returns. ‘Cookie cutter’ solutions are more generalised and ‘one-size-fits-all’ instead of tailored to what you need. One of the top things you should expect from a financial adviser is advice that suits you, so these generic solutions typically aren’t good enough.
Where You Can Find Helpful, Unbiased Financial Advice In Aotearoa
I’m proud to be a financial adviser who’s completely independent of any product provider. Any commission earned from product providers is paid to my clients. Unlike many traditional financial advisers who work for or may be influenced by business with banks, insurers, or fund managers, I strive to recommend the best solutions for my clients.
I have no obligation to recommend a particular financial product or maintain selling targets, meaning I won’t pressure you to do anything that isn't right for you.
My only remuneration is a fee for service based on an agreed hourly rate following our initial free consultation. Accordingly, you can be assured that my advice is fully independent, and I have no conflicts of interest. I also prefer to do my work myself, and I don’t outsource my work to others or employ junior staff.
With me, what you see is what you get - and that is completely unbiased, independent professional advice. I’m a skilled and highly experienced independent financial adviser, and I’m here for you.
Would you like to speak to me about what I can do for you? Just call me on +64 27 543 4455 or use my website's contact page, and we can get the conversation started.
For personalised financial advice, trust me, David Smart.