Questions to Ask Before Hiring a Financial Adviser

Questions to Ask Before Hiring a Financial Adviser

Most people hire a financial adviser the way they hire a plumber — they get a recommendation, have one conversation, and hope for the best. That works fine for a leaking pipe. It works less well when someone is making decisions about your retirement, your insurance cover, and your KiwiSaver balance for the next twenty years.

Here's the part that surprises people. In New Zealand, being listed on the Financial Service Providers Register does not mean your adviser is licensed, regulated, or even based here. The register is a starting point, not a clearance certificate. As part of the application process, only limited criminal checks are done and no other assessments are made.

So the questions matter more than the credentials. This guide walks through what to ask, what the answers should sound like, and where the money actually goes.

How We Researched This Guide

Everything here comes from the Financial Markets Authority, MBIE, the Financial Markets Conduct Act, and the Companies Office register. The regulatory detail — the duties in sections 431I to 431P, the Code of Professional Conduct for Financial Advice Services 2025, the disclosure requirements — is set out in full on legislation.govt.nz if you want to read the source material yourself.

On fees, we hit a wall worth telling you about. There is no official New Zealand-wide survey of adviser fees. Anyone quoting a single "average adviser fee" is inventing it. What we can give you are observed quoted ranges where three independent published sources converge — hourly rates, plan fees, ongoing percentages — and we've labelled them as quoted pricing, never as market averages. We also pulled platform pricing straight from each provider's own published schedule.

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The Quick Summary (60-Second Version)

If you read nothing else, read this.

• Registration on the FSPR is not a licence. Check whether the firm holds a full Financial Advice Provider licence from the FMA.
• Ask for the total dollar fee at your balance, not the headline percentage. A percentage is meaningless until you convert it.
• Observed quoted pricing sits around $200 to $400 an hour, or $1,500 to $5,000 for a comprehensive plan.
• An ongoing fee of 0.5% to 1.5% a year is $2,500 on a $250,000 portfolio at 1%. Know your number.
• Ask what commission the adviser receives, in dollars or a range, not just whether commission applies.
• Every licensed provider must belong to a dispute resolution scheme, and it costs you nothing to use it.

Step One: Check the Licence, Not the Register

The Financial Service Providers Register is where you'll find licensed advice providers and the advisers who work for them. You can search by name or FSP number. It shows registration date, trading name, business address, the services the provider is registered for, and which dispute resolution scheme they belong to.

What it does not show is whether the business is any good, or whether it's licensed at all. A provider giving regulated advice to retail clients must hold or operate under a full FMA licence. To call yourself a Financial Adviser, you must be registered and engaged by a licensed provider or authorised body.

The three-month link rule

When a provider engages an adviser, it must record that engagement by linking to them on the register within three months. If that doesn't happen, the adviser can be de-registered. It's a small detail but a useful one — if the link is missing, something has gone wrong administratively.

Also worth knowing: one adviser can work for more than one advice provider. The law allows it, but it creates confusion around complaints and privacy. Ask who is actually responsible for the advice you receive.

Step Two: Get the Fee in Dollars

Advice is priced in one of three ways, or a combination. A fixed fee for a defined piece of work. An hourly rate for a discrete question. Or an ongoing percentage of the money managed, charged for as long as it's managed. Separately, an adviser may be paid by the product provider rather than by you.

Observed quoted pricing commonly sits around $200 to $400 an hour, with junior advisers quoted lower and specialists higher. A comprehensive plan is observed in the region of $1,500 to $5,000, with complex plans quoted higher. Ongoing percentages are observed around 0.5% to 1.5% a year, generally reducing as the portfolio grows.

Those are quoted figures, not averages. No official survey exists.

Converting the percentage

At 1% a year, the fee is $500 on a $50,000 portfolio, $2,500 on $250,000, $5,000 on $500,000, and $10,000 on $1 million. At 0.5% those figures halve. At 1.5% they increase by half again. The same headline rate produces a fee ten times larger on a portfolio ten times the size.

Where an adviser charges a fee, disclosure must set out the basis, a reasonable estimate, and when it's payable. If it looks like the estimate will be exceeded, you must be told and given a further estimate.

Step Three: Follow the Commission

There are three payment models. Fee-only, where you pay directly and the adviser takes no commission. Commission, where the provider pays, usually as a percentage of the amount invested or an ongoing trail. And hybrid, which is both.

The Financial Advisers (Disclosure) Regulations 2010 require disclosure of specific fees, commissions and other benefits before the advice is given. The standard is materiality — everything must be disclosed unless a reasonable client would consider it so insignificant it wouldn't influence the adviser.

Why life insurance is the sharp end

The FMA puts life insurance upfront commission at up to 200% of the annual premium including bonuses, with servicing commission of 5% to 25% in later years. Clawback periods, usually two years, apply if you cancel early.

Read that again. An upfront commission can equal or exceed a year's premium, paid at the moment you sign. That's the mechanism the FMA is watching, and its 2026/27 priorities include targeted monitoring of how providers manage conflicts arising from both upfront and ongoing commissions.

Commission isn't automatically wrong. It means advice can be accessed without an upfront payment, which matters for people who wouldn't otherwise pay a fee. But you should know the number.

Questions the disclosure rules make answerable

Are you paid by a fee from me, commission from the provider, or both? Do different providers pay you different commission, and how is that managed? What's the total cost including underlying product costs? What's the amount or range of the commission? What happens if I cancel early? What am I paying for on an ongoing basis?

With KiwiSaver, adviser remuneration is generally built into the fund's management fee, which you pay either way. The real question is whether someone is actively reviewing your fund selection and contribution strategy.

Questions You Might Have

Do I actually need an adviser?

Not always. The FMA has found no systematic relationship between fees charged and returns received, and active funds typically don't outperform their market index after fees over meaningful periods. If you're happy choosing and monitoring a multi-asset fund yourself, a platform may be enough. Advice adds most where the decisions are complex or you won't act without someone pushing you.

What does a first meeting usually cost?

Often nothing, and now you know why. Where an adviser is paid by commission, the first meeting is effectively funded by the product provider. A fee-only adviser will generally charge for their time from the start. Neither is a red flag on its own — just be clear about which model you're sitting in.

How do I complain if something goes wrong?

All licensed providers must belong to an approved dispute resolution scheme: the Banking Ombudsman if they work for a bank, IFSO, FSCL, or FDRS. You can go direct to the scheme at any time, though it may check you've tried to resolve things directly first. It costs you nothing, works like arbitration, and doesn't close off other legal avenues.

What if my adviser works for a bank?

They can only advise on areas they're licensed and competent in, and they must tell you this upfront. A bank adviser's product range is typically limited to that bank's offerings. That's not necessarily a problem, but it's a limitation you should hear stated plainly rather than discover later.

Can I check if they've been disciplined?

Disclosure must cover previous disciplinary history, certain criminal convictions or civil proceedings, and bankruptcy proceedings within four years of discharge. The FMA also publishes investor warnings naming companies and websites to be wary of — though it only lists ones it's been told about, so absence isn't proof of anything.

What Matters Most

The regime's design assumption is that disclosure plus duties manage conflicts, rather than prohibiting them. That arms you with information instead of removing the conflict. So the disclosure document is the document that matters, and the fee conversation is the one worth having properly.

Ask for the dollar figure at your balance. Ask what the commission is worth. Ask what you get each year for an ongoing fee. An adviser who answers those clearly, without flinching, is giving you useful information about how they'll behave when the advice gets harder.

And check the licence, not just the register. It takes two minutes and it's the difference between a regulated professional and a name on a list.