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Questions For Your Investment Adviser

Contributor:
Sorted.org.nz
Sorted.org.nz

Advisers are required to tell you what
fees they receive but these don’t cover all the fees associated with a
product (such as monitoring, administration and trustee fees). Before
you sign anything, make sure you know what fees you’ll pay. An easy way
to do this is to print out the Sorted.org.nz fees checklist
and ask your adviser to complete it. That way, you’ll be able to see
what fees you’ll pay and decide whether they’re reasonable for the work
involved. Your adviser may not be able to complete the form on the
spot, but they’ll be able to get the information to you.

When you sign an application form, you’re agreeing to the terms of
the investment statement and entering a legal contract with the
provider – basically, you’re agreeing to invest money in a product or
to buy an investment based on the information you’ve been given. Before
you sign anything, make sure any additional terms and conditions that
you request are in writing.

Are the fees based on the money you invest?

Generally, a provider gets paid more if there is more money in the
fund. Sometimes they borrow money to increase the size of the fund –
rather than just relying on investors. Find out whether the fees you
pay are based on the money you invest or on ‘gross assets’ including
money the provider has borrowed to make the fund bigger. It’s better if
the fees are based only on the money you and your fellow-savers invest.

Advisers may face a conflict of interest

It's important to know how your adviser gets paid,
and the impact that can have on the advice you get. Your adviser may
have a conflict of interest if the provider pays them commission, or
they’re paid a salary by a company. Independent advisers may favour
particular companies and products. Keep in mind that if you sign up to
the investment statement, your contract is with the provider to invest
your money – it is not with your adviser (though there may be a
separate contract with the adviser). Remember to ask your adviser for
their disclosure document. This should tell you about their experience,
how they are paid and any conflicts of interest. If it doesn’t, ask.

Who to contact if things go wrong

If you have complaints about your investment or savings product, you
should contact your provider or adviser (if you have one) first of all.
If the situation cannot be resolved or you want an independent review,
contact the Office of the Banking Ombudsman on 0800 805 950 or the Insurance and Savings Ombudsman.

If your complaint is about the advice you’ve received from a member of the Institute of Financial Advisers, you can contact the Institute. They have a Complaints Committee that investigates complaints and, if necessary, takes disciplinary action.

 

Content from Sorted.org.nz, Your Independent Money Guide.

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