Free financial advice: What to look out for and where to find it

Despite some recent negative publicity surrounding certain aspects of the financial planning industry, many Australians choose to see a financial adviser for help with their money. We’ve explored some factors to consider if you’re looking for free financial advice.

Research conducted by ASIC in 2019 found that just over a quarter of Australian have received financial advice in the past, while 41% intend to get advice in the future. For those who have yet to seek financial advice, cost was the most common reason given, ahead of other factors such as a lack of trust in financial planners. The report found that 35% of people see a financial adviser as being too expensive, while nearly one in five stated they do not see the value in consulting an adviser.

If your budget is tight, but you feel like you could do with some guidance on managing your debt, investing, superannuation, insurance or other aspects of managing your money, there may be ways you can get financial advice for free.

Remember, though, regardless of whether or not you’re paying for the financial advice you receive, it’s important to carefully consider where the advice is coming from and whether it’s suitable for you. It may help to ask questions such as: Who is giving you the financial advice? What qualifications do they have? Are they licensed and qualified to offer advice in the specific area you need help with? If they aren’t charging you, how are they making money? 

What is financial advice?

Financial advice is a service offered by qualified and licensed professionals that’s designed to help individuals and families plan their finances and make important decisions about their money. People who get financial advice may be seeking help with areas such as budgeting, investing, retirement planning and insurance.

The MoneySmart website explains that financial advisers must be licensed by ASIC or work for an organisation that is licensed. This would be the case regardless of whether they are charging you for the advice you receive. In addition, financial advisers must now meet stricter formal education and training standards in order to be able to offer advice to clients.

When looking for advice about your finances, it’s important to distinguish between general and personal advice. 

Anyone offering ‘general advice’ is typically providing information to help people understand financial products, processes and guidelines that apply at a general level. Importantly, this kind of advice does not take into account an individual’s personal circumstances, although organisations and individuals must still be licensed to offer general advice.

If you are looking for personalised advice for your specific circumstances and financial needs, you might consider a financial planner or adviser who is licensed to give ‘personal advice’. These tailored services may be provided over the phone, via video call or in person and can often come with a fee attached.

Where can I get free financial advice?

If you are looking for free financial advice, there are several possible options that may be appropriate, depending on your life stage, the product or area you need help with and the urgency of your situation. There are also some key potential issues to be aware of when receiving ‘free’ advice from these sources. 

Financial planners or advisers

Financial advisers typically provide investment advice and financial planning at a cost. However, they sometimes offer an initial consultation free of charge. What this consultation covers will depend on the adviser, but ultimately it may not go into detailed ‘personal advice’. Instead these sessions can often serve as an introduction to allow the adviser to get to know you (and vice versa) and understand your situation. A free initial session may be helpful for some people whose situation does not require follow-up advice from the adviser, but bear in mind that any subsequent appointments may well come at a cost.

Some financial planners also operate on the basis that there is no cost to the client at all, even for multiple appointments. Instead, they may earn money by receiving a commission for any financial products, like insurance, that the client purchases. It’s important to understand how a financial planner or adviser makes money so you’re aware of any other incentives that could impact the advice you receive and may make it biased.

Mortgage brokers

Some people looking for guidance around the home buying process or taking out a home loan seek the assistance of a mortgage broker. Generally, mortgage brokers do not charge for advising their clients. However, as with some financial advisers, they typically make money by earning a commission from the financial institutions whose products they sell to clients. This is an important factor to be aware of when considering whether a mortgage broker is right for you, and assessing any options or products they present to you.

It’s worth remembering too that some mortgage brokers may not offer their clients a full range of home loan options. They may have arrangements in place to sell some providers’ products but not all, so it could be worth doing your own research to help ensure you’re comparing as many home loan options as possible.

ASIC’s MoneySmart provides some tips on choosing and using a broker that outlines some useful pointers, such as steps to consider taking before you meet with a mortgage broker and ways to resolve problems you may have with them.

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Your super fund

If you need help with managing your super, some funds offer free basic advice to their members in relation to things like investment options, insurance and making additional contributions. But while there may not necessarily be a direct charge for this advice, the cost is typically already factored into the regular fees you pay to your super fund.

More comprehensive advice can be available from some super funds for a fee. In some cases, this fee may be deducted from your super balance if agreed upon in advance. While not ‘free’, this could mean you avoid out-of-pocket expenses for personalised advice, but be aware that you would be eating into your retirement balance in the process.

Getting advice from your own super fund may be helpful in some situations, but bear in mind that you may only receive guidance in relation to that provider’s products and services, rather than advice that takes into account the various options out there. 

Financial counsellors

Free financial counselling is offered through selected government and community organisations, such as the National Debt Helpline or the Salvation Army. According to Financial Counselling Australia, financial counsellors cannot charge fees or receive any third party payments or commissions. 

These services are generally aimed at those experiencing financial difficulties, for example those who are struggling with debt, who need information and support. In some circumstances, financial counsellors may negotiate directly with your creditors if you are struggling with repayments. 

Some of these organisations also offer hotlines for those in specific financially difficult circumstances. This could include financial support for seniors or drought relief for affected farmers and small businesses. 

Free financial seminars

The Department of Human Services holds a variety of seminars across the country providing free advice on topics including money management and retirement. You can find upcoming seminars near you on the Department of Human Services website and book online or over the phone. 

Some super funds may also offer free seminars to their members, so it could be worth contacting your fund to check what might be on offer 

Online resources

While it’s not personal advice, many government websites, such as MoneySmart or the Australian Taxation Office (ATO), offer general information on a variety of financial matters. 

Canstar also offers general information on a range of topics, which may help you to better understand your finances, and upholds strict editorial guidelines in relation to the content it publishes.

Beyond that, you could follow finance experts on social media platforms, such as Twitter, for regular tips and updates. Be sure to check that the person or website you use a source for this kind of information is reputable.

What are some possible advantages of free financial advice?

One obvious answer is the cost-effectiveness of free financial advice. However, in addition, certain free services – such as those provided by financial counsellors – may offer support that you wouldn’t necessarily receive from an adviser or planner who charges for their advice. For example, a financial counsellor may refer you to other services such as a gambling helpline, family support service, personal counselling or community legal centre. They may also help you understand whether you are eligible for government assistance, and assist with applications if you are.

What to look out for with free financial advice

Financial advisers and planners, although sometimes offering their services for free initially, often require further consultations for you to get the full benefits of the service. For example, they may specialise in planning and developing long-term financial goals and mapping your progress over time. 

Additionally, advisers and brokers who are ‘free’ to consumers are typically still paid by commission, meaning they earn money based on the specific financial services or products they sell on behalf of other companies, or in some cases their own company. This could potentially influence the advice they give to customers, so it can be worth bearing this in mind with any free service, and trying to ensure that any products you choose are suitable for your needs.

One of the possible alternatives, although not necessarily free, is an independent financial adviser who is not allowed to earn commissions for products they recommend to clients.

Finally, it can be a good idea to be aware of the qualifications of the person providing you with financial advice, regardless of whether it is a free or paid service. Consider enquiring about your adviser’s education and qualifications and asking for their representative number, which you can check on ASIC’s financial adviser register, for details on the status of their or their company’s licence, as well as a list of the topics the adviser is allowed to advise their clients on.

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