ARTICLES > Investing - Part four.
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"Who Can I Get Advice From?" This is the fourth of a four part article on investing. Parts one and two are from the July 2011 FORTIfi Client Newsletter. Parts three and four are from the August 2011 FORTIfi Client Newsletter.There are two basic sources for financial advice; ► Financial Advisors: Financial advisors come in many guises. They may specialise in the area of investment or they may be a bank employee, a solicitor, an accountant, an insurance company representative, etc. The challenge for newcomers to the financial investment scene is that it can difficult to know whether the advice we’re receiving is sound advice or not. That’s why it’s important, as with share-brokers (see below), to shop around until you find one that suits you and understands your situation and needs. From July 1, 2011 a new law has come into force relating to people selling financial advice. The law states that anyone offering financial advice must be either Authorised or Registered as a Financial Advisor. They will show this by providing all clients with a disclosure document which gives details of their background and credentials and outlines the services they can offer. Amongst other things this means, anyone giving professional financial advise must give you a written disclosure statement that includes answers to the questions;
• What are their experience and qualifications?
• Do they have any criminal convictions? • What types of investment do they advise on? • What fees do they charge? • What interests do they have that could influence their advice? (i.e. what companies are they a shareholder in etc. and how are fees and payments structured)? • What relationships do they have that could influence their advice? ► Share-brokers: A share-broker is simply a person who buys and sells shares on behalf of another. They charge a fee for that service but in return provide expertise and a knowledge of the market that most individuals don’t have. They also provide the opportunity for smaller investors to get into the share-market because they can combine purchases from two or more individuals. The fear of many who are new to investing is that the broker they choose might be crooked or incompetent. There are, however, many guidelines and rules within New Zealand that brokers must follow and these should give new investors a level of security. As with financial advisors, share-brokers must make certain disclosures giving details of their background and credentials and outlines the services they can offer. When you first visit a broker he or she must give you a disclosure statement which advises whether, in the past five years, they or any principal officers (if there are any) in their company have been;
• Been convicted for fraud
• Worked for a firm that has been convicted of fraud • Been made bankrupt • Been expelled or barred from any professional body • Been banned from managing a company • What are their precise procedures for dealing with your money. There are many share-broking companies in New Zealand. Just check out the internet or the Yellow Pages for a full listing, and then, shop around because the fee structures vary from broker to broker. Click here for Part One of FORTIfi's series on Investing. Click here for Part Two of FORTIfi's series on Investing. Click here for Part Three of FORTIfi's series on Investing. |