What a financial adviser does and why you need one

Money management, in a loose sense, is something that most of us do everyday. From taking care of those daily expenses to saving or putting a little aside for emergencies. But that doesn’t necessarily mean we manage our money as well as we could. In fact most Kiwis live outside their means, according to Canstar’s consumer Pulse Report 2022. A shocking 58% of us spend more than we earn, a fifth live payday to payday, and about a third of us worry about the state of our finances.

When it comes to making important money decisions, having a financial adviser on your side can be a big help. Whether it’s budgeting for the day-to-day, setting simple money goals, managing debt, or finding the right mix of investments, financial planning and advice through a trusted financial adviser can set you on the right path.

But what do financial advisers do exactly? How are they different from financial mentors? And why should you bother? Read on to get the answers, find out what good financial advice looks like, where to find it and what it’ll cost.

What do financial advisers do in NZ?

In simple terms, financial advisers recommend or provide opinions on financial products such as insurance, KiwiSaver, investments and shares to help you achieve your money goals. They help you make the right decisions about what investments and products are best for you, rather than just describing products available.

Some financial advisers are aligned with a limited number of products from product providers, while others consider a wider range of products and services when they give advice. They can also provide bespoke solutions to help you set money goals and plan for the future.

While a financial mentor may coach you to make good money decisions, a financial adviser takes this a step further by helping you set financial goals, plan and manage your money, and choose the right financial products to fit your individual situation.

Financial advisers are qualified and usually members of Financial Advice New Zealand or similar organisations. They must be registered on the Financial Service Providers Register (FSPR) and hold a Financial Advice Provider (FAP) licence or be an authorised body under somebody else’s FAP licence.

Why do I need a financial adviser?

Significant life milestones can come with big money decisions, not to mention excitement, stress, and other emotions that go hand-in-hand with these events. For example, choosing the right KiwiSaver fund, paying off a student loan, buying a house, getting married, planning for a family, starting a business, or planning for retirement. Emotions and ‘analysis-paralysis’ can sometimes get in the way of taking a measured approach and making the right financial decisions.

Financial advisers can help you look at the bigger picture. They can help you consider the variables, weigh up the pros and cons, point out things you may not be aware of, revisit your money goals and provide reassurance that you’re on track.

Financial advice has an obvious part to play in wealth creation, but it also contributes to health and wellbeing by alleviating stress, money worries and feelings of financial insecurity. In other words, financial advice can provide peace of mind that you’ve made a smart decision.

Following an independent survey of New Zealanders on the value of financial advice in 2020, Core Data and Financial Advice New Zealand revealed that New Zealanders who get professional financial advice are more likely to feel happy with their financial position and better prepared for the future than those who don’t. They feel more confident in their financial decision making, in control, and clearer about their finances. They have contingencies in place to handle unexpected costs, and know how to utilise their KiwiSaver to the best of their ability (Financial Advice New Zealand Trust in Advice report, July 2020).

Financial advice is for all ages and stages of life and is particularly valuable when short, medium and long-term needs are balanced. Engaging with a Financial Adviser as early as possible in life can set you up for financial security and success because your progress and needs can be tracked over time.

What does good financial advice look like?

Before making any recommendations, a good financial adviser will get to know you and your individual circumstances. They’ll ask you lots of questions to understand your current financial situation, goals and requirements. They’ll make the complex simple so you can understand exactly what’s being recommended, and provide you with all the information you need to make informed decisions.

As you move through life, your financial goals and requirements are likely to change. A good financial adviser will touch base with you semi-regularly to track your progress against goals and see if your plan or products need adjusting.

At Blue Canoe, our vision is simple – to help you navigate your financial journey and plan for your future, so you can live it. The way we do this is by discovering your motivations and looking at your financial priorities and goals for the future.

Where can I find a financial adviser?

In most cases, a financial adviser’s number one goal is to help you create wealth. This is a long-term thing, so choosing a financial adviser you trust and who provides you with the right scope of service is very important.

While your existing financial services provider, such as your bank, may offer financial advice, it’s best to check the breadth of what they offer so you’re not limited to receiving financial advice on their products and services only.

If you’re looking for advice that considers a wider mix of products and services, then it’s best to seek advice from a specialist independent financial adviser, like Blue Canoe. Professional adviser association websites, such as Financial Advice New Zealand, provide searchable lists of advisers near you.

How much does a financial adviser cost in NZ?

The cost of financial advice in New Zealand depends on your individual needs, and fee and commission structures vary from adviser to adviser. It’s important you ask for a clear explanation, upfront, of how your adviser gets paid. Some advisers offer fixed price packages that include a range of services, while others will only provide customised options. Some charge clients $250 or more for an initial consultation, while others don’t charge a consultation fee at all.

At Blue Canoe, we offer the best of both worlds through a range of premium coaching packages to help you gain financial control. Our services include a kickstarter package to set you on the right path, a premium package for long-term financial success, and a custom package for a more tailored, pick-n-mix approach.

We offer all new clients a complimentary 1-hour discovery session where a thorough assessment is done to determine your needs.

Book your free consultation with one of our advisers, or get in touch to learn more.