Financial Advice


The financial advisers are responsible for providing financial services such as advice and intermediary services. The definition of a financial service in the Financial Sector Regulation Act, 2017 is based on the fact that they advise, recommend or help clients make decisions about money. Often the financial services providers provide a wide range of services and products. However, their fees may vary, as they may be commissioned to sell specific products and/or services.

Registered financial advisers are required to meet a number of minimum standards, including meeting the suitability standard. The suitability standard means that an advisor’s recommendation must be based on a reasonable basis. A small firm may register with a state authority, but those with assets greater than $100 million must register with the SEC. As a rule, a financial advisor must have a minimum of $100,000 in assets before they can offer advisory services.

Whether or not an individual or firm is a registered financial service provider is a matter of personal preference and how much you’re willing to spend. The requirements vary widely, but generally most firms charge between 1% and 2% of AUM per year. As an example, if you have $250,000 in assets, a 1% fee would cost you $625 every three months. The fee scale for registered financial advisers is usually sliding, meaning the higher the assets, the lower the fees.

A registered financial service provider must meet a minimum level of qualifications. The FINRA standards require that all individuals providing financial advice have at least a National Certificate. In addition, small firms that employ financial advisors must register with the SEC or state authority. For those with more than $100 million of assets, a regulated firm is required to register. The act imposes strict regulations on the practice of financial advisers.

Financial advisors typically charge by the percentage of AUM they manage. The industry average is around 1%, but some firms can charge as high as 2%. The fees are deducted quarterly, so if you have $250,000 in assets, the fee will be $625 every three months. Often, these advisers offer sliding-scale fees and you must pay them accordingly. A good adviser will be able to tell you the amount of each monthly payment and what their fee is.

A registered financial services provider is required to follow a strict set of standards. In New Zealand, the adviser must be registered with the Financial Conduct Authority (FCA). A non-registered financial service provider is not required to register. Unless the adviser has more than $100 million of AUM, they must file with the U.S. Securities and Exchange Commission. All other financial services providers must register with the SEC or a state authority.

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