Whenever I'm asked how to find an adviser, I just say it's the same as choosing a doctor or dentist.
Turns out this might have been a bit glib. The difference is you might find a financial adviser who isn't one. At least a doctor or dentist is qualified and there are heavy sanctions for impersonations.
Advisers will have to be licensed after July 1, though how to find the best one is still a good question. But since you could be giving away your most intimate financial secrets, or - possibly worse - not have any, empathy would have to rate highly, I imagine.
Unfortunately, being reassured that somebody is a fair-dinkum financial planner doesn't necessarily mean you'll get what you want.
Don't expect an adviser to give you a hot share tip - one who does is bound to be suss.
Nor do the government's reforms, such as abolishing commissions paid to advisers and insisting they act in your "best interest", require the advice to be useful or affordable. So long as there's to be no conflict of interest, ASIC as enforcer is happy.
Perhaps that's just as well. Volunteers secretly sent by ASIC to randomly selected planners for advice only took it if they liked what they heard. One volunteer who wanted to retire early even rated being told to pay off the mortgage first as bad advice.
Although the reforms were prompted by the collapse of Storm Financial, which incidentally offered clients a choice of commissions or fee for service, I'm blowed if I can see they would have made any difference. You can't regulate against bad advice. Or greed on either side.
It was Storm's close links with the big banks that got its clients into strife - and that's the financial planning industry's real problem, which will only be exacerbated by a slew of new regulations driving smaller, non-aligned planners out of business.
Storm encouraged its clients to borrow too much. But it's still in the career interests of even the most well-intentioned bank-owned planners to push the products - usually a managed fund - of its parent.
Sometimes banks have even roped in independent planners by providing them with a so-called platform or wrap, which is a sort of shop front of financial products, only with an entrance fee to be shared with everybody but the client.
Frankly, whether there are commissions along the way isn't the main problem.
Besides, advisers will still be able to charge an asset fee. Since the more you invest the bigger the take, so the more incentive an adviser has to sell you a managed fund. You tell me the difference between that and a commission.
Annuity providers sure can't. They're going to pay advisers what they call an implementation or placement fee for drumming up business, which is the same amount, down to the last cent, the commission would have been.
Which reminds me, commissions will continue on anything sold before July 1.
So it's in the interests of those advisers on commissions in ASIC's firing line to lie low. Any change to a portfolio, even if there's a problem with it, or additional advice would shoehorn them into the new regime.
Trouble is, a proper financial plan already costs about $2500 and a lot more if your financial affairs are complicated. Incredibly, this isn't even tax deductible.
And never mind the new regime will depend on strict enforcement by ASIC, which has a habit of shutting the stable door after the horse has bolted.