Finding a financial adviser isn’t hard. Choosing the right one is.
With real differences in qualifications, independence, and how advice is delivered, many Australians end up with advice that doesn’t truly serve their interests. The mistakes are common and often avoidable.
Below, we outline the top mistakes most frequently made by Australians when choosing a financial adviser (or financial planner), along with practical ways to make a more confident choice.
Summary: Top Mistakes When Choosing a Financial Adviser
The table below highlights the most common mistakes Australians make when choosing a financial adviser, along with the key issue to watch for in each case.
| Mistake | What to Watch For |
|---|---|
| Not checking qualifications and licensing | Adviser not listed on the ASIC Financial Advisers Register |
| Not understanding how the adviser is paid | Fees unclear, poorly explained, or not agreed upfront |
| Assuming all advisers offer the same services | Gaps between your needs and the services provided |
| Ignoring early red flags | Pressure to act quickly or vague answers |
| Skipping personal research | Relying on one source or referral alone |
| Choosing based on personality | Likeability outweighing experience or capability |
| Not asking about ongoing support | No clarity on reviews, access, or ongoing fees |
| Overlooking adviser independence | Potential conflicts of interest or product alignment |
| Not understanding the advice process | Confusion between guidance and personal advice |
| Rushing the decision | Feeling pressured to sign or commit |
Before diving into each mistake, it’s worth remembering that choosing a financial adviser should feel considered and transparent. Taking time to understand these common pitfalls can help you avoid poor advice and make a more informed decision.
Mistake #1: Not Checking a Financial Adviser’s Qualifications and Licence
In Australia, financial advisers must meet strict education and training standards set by regulators. For advisers entering the profession under current rules, this includes completing an approved bachelor’s degree or higher at AQF7 level, passing the ASIC financial adviser exam, and completing a 1,600-hour professional year under supervision.
Many of the most common mistakes when choosing a financial adviser stem from assumptions about qualifications and licensing.
All practising advisers must be registered on the Financial Advisers Register and comply with the Financial Planners and Advisers Code of Ethics. Some experienced advisers operate under transitional arrangements, but the register allows you to confirm an adviser’s licensing status, qualifications, and compliance history using verified ASIC data.
It’s also important to remember that while qualifications and licensing are essential, they do not guarantee the quality of advice or the results you’ll receive.
Mistake #2: Not Understanding How a Financial Adviser Is Paid
Unfortunately, financial advice doesn’t come for free. Yet many Australians don’t fully grasp how adviser fees work. Our research suggests fees typically range from $2,000 to $20,000 per year, with an average of around $3,500.
What financial advice costs you might not be the same as what it costs your family member, friend, or neighbour. Your needs may be more or less complex, and you may need more or less support inthe future. Before committing, it helps to ask clear questions about what you are paying for and why.
- One-off advice fees apply to a single plan or limited advice
- Ongoing advice fees are charged yearly for continued support and reviews
- Ongoing fees only continue with your written consent each year
Mistake #3: Assuming All Financial Planners Offer the Same Services
Not all financial advisers do the same type of work. Some focus on broad financial planning, while others specialise in areas like investments, superannuation, or retirement planning. Assuming every adviser covers everything can lead to gaps in advice.
Before choosing someone, it helps to understand exactly what support they provide and whether it aligns with your needs.
Depending on your circumstances, a financial adviser may help with:
- Setting financial goals that suit your lifestyle and future plans.
- Building a strategy that maps out steps over time.
- Managing investments based on your risk comfort and objectives.
- Adjust plans as needed if requirements change.
- Understanding your situation and making your choices easy to understand.
Mistake #4: Ignoring Red Flags in Early Adviser Conversations
Shopping around for a financial adviser might not be high on your list of fun things to do. And when we rush these decisions, we may miss red flags that indicate we should walk away.
Here are some warning signs you might see. If any of these arise, we encourage you to continue your search for a financial adviser elsewhere.
- You feel rushed to make decisions or sign paperwork before you are comfortable with them.
- Clear answers about fees, commissions, or total costs are avoided or brushed aside.
- Conversations feel scripted rather than focused on your personal situation.
- Written explanations, reports, or records are missing or incomplete.
- The adviser sidesteps your questions about their education and required certifications for the job.
Mistake #5: Skipping Personal Research Before Choosing a Financial Adviser
There are a lot of resources available to help you find the right financial adviser. Our site and recommendations is just one of many. That said, you should do some personal research before assuming that any adviser you find online will meet your needs.
Here are some steps we recommend.
- Ask trusted family members or friends if they have worked with a financial adviser they would recommend.
- Read independent reviews and testimonials, not just what appears on an adviser’s own website.
- Check the Financial Advisers Register to confirm registration and background details.
- Look for experience that aligns with your financial goals and life stage.
- Take time to compare more than one adviser before making a decision.
Mistake #6: Choosing a Financial Adviser Based on Personality Alone
The best financial advisers have personalities designed to draw you in. Their entire business is built on building trust with clients and helping them succeed financially. And building trust matters, but likeability should not drive the decision.
Feeling comfortable with someone is helpful, yet it does not replace experience, education, or the right service offering. Agreeing to work with an adviser simply because you like them or want to avoid an awkward conversation can lead to poor outcomes.
Instead of personality, focus on the following.
- Their qualifications and registration
- How clearly they explain fees and advice
- Whether their services match your needs
Mistake #7: Not Asking About Ongoing Financial Advice and Reviews
Though some consumers simply want one-time guidance, most financial advisers provide the most benefit when you work with them for the long haul. That said, don’t assume that an adviser will work with you long term.
Here are some questions to ask a financial adviser to make sure they can provide the long-term support you need.
- How often will we review my financial situation and update my plan?
- What level of access will I have to you between scheduled reviews?
- How does your service change if my goals, income, or circumstances shift?
You may also want to clarify whether you’ll work directly with the adviser you meet, or primarily with support staff once advice is implemented.
Mistake #8: Overlooking Adviser Independence and Conflicts of Interest
Some financial advisers are linked to specific product providers or operate under ownership structures (e.g. bank-affiliated) that can influence their recommendations. These ties can shape advice in ways clients may not expect.
In Australia, only advisers who meet strict ASIC criteria can legally call themselves “Independent”, meaning they do not receive commissions or conflicted remuneration and are not aligned to product providers. By contrast, advisers who receive incentives for placing clients into certain investments may favour those options over others. Australians should ask clear questions about independence, ownership, and how recommendations are selected before agreeing to work together.
Mistake #9: Not Understanding the Financial Advice Process
Many Australians confuse general guidance with personal financial advice. We understand this because the differences can be confusing.
Here’s an easy way to tell the difference.
- Guidance offers broad information.
- Advice is tailored to your specific needs and long-term goals and includes formal documentation.
A Statement of Advice outlines recommendations, costs, risks, and how strategies may affect you. Ask about the timeline from your first meeting through to implementation so you know what to expect. Understanding the process at the forefront will prevent confusion and delays. Further, it will prioritise that your expectations are met now and in the future.
Mistake #10: Rushing the Decision to Choose a Financial Adviser
If you are ready to hire a financial adviser, it’s likely that you just want things in place so that you can move forward. But rushing your decisions isn’t the best course of action. Pressure from any adviser should be a warning sign, as we discussed earlier. And limited-time offers, or urgency around signing paperwork, often benefit the adviser, not you.
Taking time to compare options allows you to ask better questions and reflect on what feels right. Choosing a financial adviser should feel considered and deliberate. You should never, ever feel rushed or forced into making a decision, especially when it comes to your financial situation.
Making a Smarter Choice When Choosing a Financial Adviser
Avoiding these mistakes doesn’t require specialist knowledge, iit simply means slowing down and being deliberate. Taking the time to check qualifications, understand how fees work, and ask direct questions can significantly improve the quality of advice you receive.
A good financial adviser won’t rush you, gloss over details, or make decisions feel unclear. Instead, they should take the time to explain their approach, set expectations upfront, and work with you at a pace that feels right. When you choose carefully, financial advice is far more likely to support your goals rather than complicate them.
Sources:
Become a financial adviser. CPA Australia. (n.d.). https://www.cpaaustralia.com.au/tools-and-resources/financial-planning/become-a-financial-adviser
Financial Advisers Register – moneysmart.gov.au. (n.d.-a). https://moneysmart.gov.au/financial-advice/financial-advisers-register
Statement of Advice. ASIC. (n.d.-g). https://www.asic.gov.au/regulatory-resources/financial-services/giving-financial-product-advice/statement-of-advice/
