There are things you should expect from all advisers, regardless of the type of advice you’re receiving. All advisers providing personal advice should provide you with their disclosure document(s). The disclosure document(s) provide useful information about the adviser. When providing personal advice we would also expect the adviser to:
talk to you about your personal situation so they understand your circumstances and goals
talk through their recommendations, explaining why they think these are right for you
explain how they’re paid
explain how their complaints process works and tell you who their dispute resolution service provider is.
When recommending you change from one product to another
Your adviser must provide a clear and balanced comparison of your existing and new products. They must explain if the new product is suitable and if it has any exclusions or limitations. For example, if you’re changing your life or health insurance, they should tell you if there is any reduction in cover (or no cover) for pre-existing conditions that are covered under your existing insurance.
If they can’t provide a specific comparison (for example, if they’re not qualified to comment on other provider’s products), ask them to explain this. They should also explain the types of risks involved with changing products so you can investigate this further yourself or get a different opinion if you wish.
When providing you with a written plan
As well as providing personal information about you and your goal, you can expect the plan to record
a clearly defined scope of service so you know exactly what advice is and isn’t being provided – see working with an investment adviser.
information about the advantages and disadvantages of each suggested option.
If an adviser is providing personal advice and has suggested particular investment products, they should provide you with enough information in writing to enable you to make an informed decision. This could include
information about why these are right for you. For example, do they meet your personal goals and tolerance for risk?
what returns you can expect and how likely these are to go up and down over time.
information about appropriate benchmarks, to compare how your investment portfolio is performing against other similar portfolios in the market.
what you'll pay and how to get your money out.
details of the information you’ll receive about your investments.
They must also give you the specific product disclosure information for each product you are using. We expect advisers to be able to explain everything they give you in plain English and to be happy to answer as many questions as you have.
Am I a retail or wholesale investor
Generally, you’ll be a retail investor unless you meet certain criteria, for example, you’re a family trust or you have a large sum of money. In this case, you could automatically be considered a ‘wholesale investor’.
Make sure your adviser explains very clearly what a wholesale investor is and what the implications are of being a one. Wholesale investors have less protection if things go wrong. We expect advisers will only recommend you become a wholesale investor if you have significant experience in investing and investment markets. You can opt out of being a wholesale investor if you want to.