What is financial advice

A financial adviser can help you make decisions about money by giving you general or personal advice based on your situation.

Understand what financial advice is

Financial advice helps you make decisions about money. You might want help with:

paid wealth-building strategies

paid choosing investments

paid planning for retirement

paid understanding your super

paid protecting your income or assets

A financial adviser can help you make financial decisions and plan for the future. Advice can be general (usually free), or personal, which means the financial adviser has considered one or more of your objectives, financial situation or needs (usually for a cost).

If you're unsure what you need, this page explains the main types of advice and the services advisers provide. It also shows how advice is delivered and how to spot a qualified adviser.

This page covers personal advice, which is the type of financial advice that you would usually expect to receive from a financial adviser.

Before you decide to meet with a financial adviser understand the difference between general advice, personal advice and financial information.

Personal advice and what it covers

Personal advice is tailored to your relevant circumstances. You may be looking for comprehensive advice that covers a range of topics. Or you may want advice about one single issue. The scope of the advice agreed with your financial adviser will affect the cost of the advice.

You can also decide whether you want your financial advice relationship to be ongoing (which usually includes regular monitoring and reviews of your financial plan and affairs) or one-off.

What good quality advice looks like

The Australian Securities and Investments Commission (ASIC) considers that good quality financial advice is underpinned by six principles. Good quality advice:

check_box meets the client’s needs, as well as satisfying the requirements of the law;

check_box refines and clarifies a client’s objectives, and helps the client, as much as possible, to achieve those objectives or understand any challenges in meeting them;

check_box can be comprehensive or more limited in scope, depending on the client’s needs and circumstances;

check_box educates and equips clients to make informed decisions about their finances, including whether to accept and implement the strategies and products recommended to them;

check_box is strategy led, with product recommendations that follow, rather than direct, the suggested strategies;

check_box involves good communication - often including a Statement of Advice and the opportunity to discuss the advice.

How financial advice is delivered

You don’t necessarily have to meet with a financial adviser in person (or at all) to get personal financial advice. You can choose a channel that suits you and suits the nature of the advice you're seeking (comprehensive or something less).

Face to face. This might be best when your finances are complex or you want a close working relationship. You and your financial adviser can read body language, ask questions in real time and build trust.

Phone or video. This can provide a good balance of personal contact and convenience. Video calls let you share screens and documents and still ask questions in real time.

Digital advice. These services (which may be known as robo-advice) are automated financial product advice, using algorithms and technology, often without the direct involvement of a human. No matter what channel you choose for personal advice, generally, the first advice you receive on any particular topic will be documented in a Statement of Advice (SOA). See working with a financial adviser for a list of things that a SOA will include.

To find out more about what financial advisers can do for you, and how to find one that suits your needs, see  choosing a financial adviser.

Some common questions answered

Common questions include:

Q: What’s the difference between financial information, general advice and personal advice?

A: Financial information is factual content (for example, product features, interest rates or some calculators).

General advice involves recommendations or opinions about financial products without considering your relevant circumstances.

Personal advice is tailored to your objectives, financial situation and needs, and must explain why the recommendations suit you. Find out more.

Q: Do I have to pay for personal financial advice?

A: Often, you’ll pay for personal advice. Costs vary by the scope of advice: single issue or limited advice is usually cheaper than comprehensive advice. Always ask for a written fee summary before you agree to anything.

Q: What’s the difference between financial planning and financial counselling?

A: Financial planning usually involves personal advice from a registered financial adviser (also known as a financial planner) that has considered one or more of your objectives, financial situation or needs. They might advise you on areas such as wealth accumulation, retirement planning or protecting your income, assets and family’s future if you become sick or injured. The financial adviser you choose should be qualified and authorised to provide personal advice about the financial products you need them to cover in their advice.

Financial counselling is a free and confidential service offered by not-for-profit community organisations for people in financial hardship. Counsellors help with budgeting, negotiating with creditors and finding emergency support; they do not give personal product advice. If you’re in crisis or can’t pay bills, start with financial counselling.