The value is rarely where people expect it
Ask someone what a financial adviser is for and most will say something about picking investments. That is the part that gets talked about, and it is usually the smallest part of the job.
Investment selection matters, but it is also the most commoditised thing in the industry. Low-cost diversified options are widely available and, over long periods, the difference between a sensible portfolio and a slightly different sensible portfolio is modest compared with the difference between having a strategy and not having one.
The value tends to sit in the unglamorous places instead: whether your money is structured correctly, whether you are exposed to something that would be catastrophic, whether you are paying tax or fees you do not need to, and whether you actually stick to the plan when it becomes uncomfortable.
Four things advice actually does
It makes decisions in the right order. Most people arrive with three or four competing priorities: the mortgage, super, school fees, an investment they have been meaning to make. There is usually a defensible order, and it is not always the intuitive one. Working through it stops the largest opportunity being crowded out by the loudest one.
It closes the gaps you cannot see. Cover that no longer matches your obligations, insurance sitting in a fund you are about to roll out of, a loan structure that quietly forfeits a deduction, a beneficiary nomination that lapsed years ago. None of these announce themselves. All of them are cheap to fix once found and expensive to discover at the worst moment.
It takes advantage of structure. Which entity holds an asset, whether a contribution is made before or after tax, whose name an investment sits in, when an asset is sold. These are the levers with real leverage, and they are the ones most easily got wrong without knowing the rules.
It changes behaviour at the moments that count. This is the one that is hardest to price and probably matters most. The single most destructive thing an investor can do is sell a long-term portfolio during a downturn, and the second is stop contributing. A plan you agreed to in advance, written down, with someone to call, makes both far less likely.
Where advice is not worth paying for
Your situation may be genuinely simple: one super fund you have already checked the fees on, no dependants, no debt beyond a mortgage you are comfortably servicing, and no imminent decisions. If so, you may not need ongoing advice, and reading the guidance on Moneysmart and acting on it will get you a long way.
Advice also does not overcome arithmetic. If the income is not there, or the timeframe is too short, no strategy invents the difference. A good adviser will tell you that plainly rather than sell you a product that appears to solve it.
And it is worth being blunt about a third case: if you are looking for someone to beat the market, you are shopping for something nobody can reliably supply, and the firms most willing to imply they can are the ones to avoid.
How to judge what it costs
Ask for the fee in writing before any work begins, and ask what it covers and what it does not. A fixed fee quoted upfront is easy to assess. A percentage of your balance that grows every year while the work stays the same is harder to justify and worth questioning.
Then judge the cost against the specific problems being solved rather than against a percentage. If advice restructures your cover, corrects a contribution strategy and finds a duplicate fee you have been paying for a decade, the value is concrete and you can see it. If nobody can tell you what will actually change, that is your answer.
One thing worth knowing: initial conversations are commonly free, including ours. There is no reason to pay to find out whether someone can help you.
Telling advice from a sales process
A few things reliably distinguish the two. Advice starts with questions about your life and ends with a recommendation you understand; a sales process starts with a product and works backwards. Advice includes the option of doing nothing; a sales process never concludes that your current arrangements are fine.
Ask who the adviser is licensed by and ask for their Financial Services Guide; it sets out their services, how they are paid, and how to complain. Anyone reluctant to hand it over has told you something useful.
Ask what they would tell you not to do. A good adviser has a ready answer, because saying no to things is most of the job.
None of the above requires you to engage anyone, including us. If it is useful on its own, that is a fine outcome.
This article is general information only and does not take into account your objectives, financial situation or needs. Right Advice Wealth Management is an Authorised Representative of SGN Financial Pty Ltd ABN 40 120 395 904, AFSL 490523.