Financial Services Guide (FSG)

A licensed financial services provider must give you a written financial services guide (FSG) before you start dealing with them. Get a financial services guide from all the people on your list before getting into discussions with any one adviser. If someone says they don't have a guide, cross them off your list of potential financial advisers.

The FSG explains:

  • the services that the adviser offers;
  • how they operate;
  • how they get paid (including any commissions);
  • how they deal with customer complaints;
  • any interests, associations or relationships that could influence them.

The information in a FSG should be presented clearly and concisely, with enough detail for you to make an informed decision about whether you want the services described.

Five key facts to check in a financial services guide

1. Is the adviser licensed?

Use the guide to check if the adviser either:

  • holds a financial services licence from a licence holder, or
  • is the employee of a licence holder, or
  • has an authority to represent the licence holder (authorised representative).

Deal only with licence holders, their employees or their authorised representatives.

2. How does the adviser handle customer complaints?

The guide must explain how the adviser deals with customer complaints. If the guide does not tell you about these things, avoid that adviser. All advisers must have internal procedures to handle complaints and must also belong to an independent complaints scheme approved by ASIC. This helps you if anything goes wrong. The complaints scheme is a free service.

3. What products do they offer?

The guide must tell you clearly what services are being offered and if the adviser can:

  • prepare an investment plan for you;
  • advise you on a particular business that you are planning to invest in;
  • sell you an investment product (such as shares and managed investments).

If it's not clear, make a quick phone call to find out.

4. How is the adviser paid?

The guide must tell you how the adviser is paid. Some will charge fees for the time they spend with you or for writing plans; some will earn commissions on products you buy from them; and others will have a mixture of fees and commissions. You need to know if there are commissions because they may add to your costs of investing.

5. Does the adviser work for, or have links with, a financial institution?

The guide will show if the adviser works for, or is connected with, an investment company or bank. This may reduce the range of investment products they recommend.

By Australian Securities and Investment Commission


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