Five Questions to Ask Before You Take Any Financial Advice

Good advice starts with knowing who you are actually talking to, and whether they are working for you. That sounds obvious, but in financial services it’s not always clear, and it’s rarely spelled out unless you ask directly.

Before you act on advice from anyone, whether that’s me or someone else, here are five questions worth asking. None of them are complicated, and any adviser worth working with should be able to answer them plainly.

1. Are you paid a fee, a commission, or both?

This is the single most useful question you can ask, because it tells you how the adviser’s income relates to the advice you’re given. A fee-only adviser is paid by you, directly, for advice, regardless of what you end up doing with it. A commission-based adviser is typically paid by the product provider when a policy or investment is put in place, which can be entirely legitimate, but it does mean their income depends on you buying something specific.

Neither model automatically means good or bad advice. But you should know which one you’re dealing with before you take the advice, not after.

2. Are you tied to a particular product provider?

Some advisers operate under an agreement with a specific insurer, bank or investment provider, which can limit the range of products they’re able to recommend, even if a different provider would suit you better. Others are independent and not contractually tied to any provider.

Ask plainly: are you able to recommend across the whole market, or only from a limited panel? There’s nothing wrong with either model existing, but you’re entitled to know which one is shaping the recommendations in front of you.

3. What is the actual scope of the advice?

Financial advice can mean very different things depending on who’s giving it. Some advisers focus narrowly on a single product, like a mortgage or an insurance policy. Others take a broader view across your whole financial position, KiwiSaver, insurance, structure, saving and long-term planning together.

Ask what’s actually being covered, and just as importantly, what isn’t. A narrow recommendation made without seeing the full picture can look sound in isolation and still be the wrong move for your overall situation.

4. How exactly are you paid, and by whom?

This goes a step further than the fee-versus-commission question. Ask for the specific number, the specific structure, and who ultimately pays it. A good adviser will tell you plainly, usually in writing, before you commit to anything. If the answer is vague, evasive, or wrapped in language designed to make it hard to follow, that’s worth paying attention to.

5. Will you put your recommendation in writing, with your reasoning?

A regulated financial adviser in New Zealand is required to act in your interests and to be able to explain why a recommendation suits your circumstances. Ask for the recommendation and the reasoning behind it in writing. This isn’t about catching anyone out, it’s about giving you something you can actually sit with, compare, and revisit later, rather than a verbal pitch made in the moment.

If an adviser is reluctant to put their advice and their reasoning in writing, that reluctance tells you something.

Why this matters

None of these questions are hostile, and a competent, ethical adviser will welcome all five. They exist because financial advice in New Zealand comes in genuinely different shapes, fee-only versus commission-based, independent versus tied, narrow versus comprehensive, and those differences matter more than most people realise going in.

I work on a fee-only, independent basis: I’m paid directly by clients for advice, I’m not tied to any product provider, and where a policy or investment actually needs to be put in place, that implementation is handled by separate broker partners rather than by me. If you’d like to see what that looks like in practice, a free discovery session is a good place to start, no obligation, no product to sell you.