Personal Finance Advisor: How Professional Financial Advice Can Help

Managing personal finances involves more than earning an income and paying bills. Decisions around saving, investing, insurance, debt, KiwiSaver, and retirement can all affect your long-term financial position.

A personal finance advisor can help individuals understand their financial circumstances, establish realistic goals, and develop a strategy for managing their money. Rather than focusing on one financial product or decision, personal financial advice can bring different aspects of your finances together.

For New Zealanders, financial advice is regulated, and advisers providing regulated advice to retail clients must operate within the country’s financial advice regime. The Financial Markets Authority (FMA) states that advisers must meet standards relating to conduct, client care, competence, and suitability of advice.

What Is a Personal Finance Advisor?

A personal finance advisor provides guidance designed to help individuals make informed financial decisions based on their circumstances and goals.

Depending on their scope of service, an adviser may assist with areas such as:

• Investment planning
• Retirement planning
• KiwiSaver
• Insurance
• Mortgages
• Savings strategies
• Financial goal setting
• Personal financial planning
• Reviewing existing financial arrangements

Not every adviser provides advice across all these areas. The FMA recommends checking an adviser’s scope of service and understanding what they are licensed and competent to advise on.

Why Consider a Personal Finance Advisor?

Personal financial decisions can become complicated as your circumstances change. Buying a home, starting a family, changing careers, receiving an inheritance, preparing for retirement, or building investments can all create new financial considerations.

A personal finance advisor can provide an objective perspective and help connect individual decisions to broader financial goals.

For example, someone saving for a first home may need to balance saving a deposit with managing debt, maintaining an emergency fund, and making appropriate investment decisions. Someone approaching retirement may have different priorities involving KiwiSaver, investments, income requirements, and risk.

Professional advice can help bring these considerations together.

What Can a Personal Finance Advisor Help With?

Financial Goal Setting

A financial plan starts with understanding what you want to achieve.

Goals may include buying a home, building investments, creating financial security, funding education, starting a business, or preparing for retirement.

An adviser can help turn broad objectives into more structured financial goals and consider the steps required to work towards them.

Budgeting and Cash Flow

Understanding where your money comes from and where it goes is an important part of personal financial planning.

Reviewing income, regular expenses, debt repayments, savings, and discretionary spending can help identify how much money is available for future goals.

While budgeting assistance may also be available through financial mentors, a financial adviser can provide broader advice where regulated financial products and long-term financial planning are involved. Consumer Protection distinguishes financial mentoring from regulated financial advice.

Investment Planning

Investing can be an important part of long-term wealth building, but investment choices involve different levels of risk, costs, timeframes, and potential returns.

A financial adviser can help assess your objectives and explain investment options that may be appropriate for your circumstances.

The FMA says investment advisers should understand a client’s needs and goals, explain how investments work, discuss risks and potential returns, and help establish an appropriate portfolio.

KiwiSaver Planning

KiwiSaver is an important component of retirement planning for many New Zealanders.

A personal finance advisor can help you understand how your KiwiSaver arrangements fit into your wider financial strategy. This may include considering your contribution approach, investment choice, risk tolerance, and retirement objectives.

The right approach will depend on individual circumstances rather than being the same for everyone.

Retirement Planning

Retirement planning is about determining how your financial resources may support the lifestyle you want in the future.

A retirement strategy can consider savings, KiwiSaver, investments, expected expenses, income requirements, and the timeframe available to prepare.

Starting the planning process earlier can provide more opportunities to adjust savings and investment strategies as circumstances change.

Insurance Planning

Insurance can help protect your financial position against unexpected events.

A personal finance advisor can help assess financial risks and consider whether areas such as life, health, income protection, or other forms of insurance need to be incorporated into a broader financial strategy.

Insurance advice is a specific area of financial advice, and advisers may have different scopes of service.

How to Choose a Personal Finance Advisor

Choosing the right adviser is an important decision. The FMA recommends understanding what you want to achieve, researching potential providers, and checking their registration and scope of service.

Check Registration

If you are receiving regulated financial advice as a retail client, make sure the adviser is operating under the appropriate Financial Advice Provider framework.

The FMA states that financial advisers must be registered on the Financial Service Providers Register (FSPR) and engaged by a licensed Financial Advice Provider or authorised body.

Understand the Scope of Advice

Ask the adviser what areas they specialise in and what types of financial products or services they can advise on.

Some advisers may focus primarily on investments, while others may specialise in insurance, mortgages, KiwiSaver, or broader financial planning.

Understanding the scope can help you determine whether the adviser is suitable for your needs.

Ask About Fees

Financial advisers may be paid through fees, commissions, or a combination of arrangements.

The FMA says advisers should explain how they are paid and disclose relevant fees and costs associated with their advice.

Before agreeing to advice, ask for a clear explanation of the costs and what services are included.

Look for Clear Communication

Financial advice should be understandable.

A good adviser should explain recommendations, discuss why they may be suitable, outline relevant risks, and give you an opportunity to ask questions.

Under the Code of Professional Conduct, advisers providing regulated retail advice must treat clients fairly, act with integrity, provide suitable advice, and ensure clients understand the advice.

What Information Will a Personal Finance Advisor Need?

To provide personalised advice, an adviser may need information about your overall financial situation.

This could include:

• Income
• Regular expenses
• Savings
• Investments
• KiwiSaver
• Mortgages and other debts
• Insurance policies
• Financial goals
• Assets and liabilities
• Retirement objectives

The FMA notes that advisers may ask about a client’s personal circumstances, assets, debts, income, expenses, insurance, and estate planning when developing personalised advice.

Providing accurate information can help ensure recommendations reflect your actual circumstances.

When Should You Consider Financial Advice?

There is no single point at which everyone needs a personal finance advisor.

Professional advice may be particularly useful when you are facing a major financial decision or change in circumstances.

Examples include:

• Buying a first home
• Planning for retirement
• Starting or selling a business
• Receiving a significant inheritance
• Building an investment portfolio
• Reviewing KiwiSaver
• Taking on substantial debt
• Reviewing insurance
• Developing a long-term financial strategy

Advice can also be useful simply when you want an independent review of your existing financial arrangements.

Benefits of Personal Financial Planning

A structured approach to personal finance can provide greater clarity around where you are today and where you want to go.

Working with a personal finance advisor may help you:

Create clearer financial goals: Establish priorities and develop a structured approach to achieving them.

Understand your financial position: Review income, expenses, assets, liabilities, savings, and investments together.

Manage financial risks: Identify areas that could affect your financial security and consider appropriate strategies.

Make informed investment decisions: Understand potential options, risks, costs, and timeframes.

Prepare for the future: Build a financial strategy that considers longer-term objectives such as home ownership and retirement.

How Aurora Financials Can Help

Aurora Financials can support clients with financial planning and strategic financial decision-making, helping individuals gain greater clarity over their financial goals and priorities.

A comprehensive approach can bring together areas such as financial planning, investments, cash flow, risk management, and long-term objectives.

If you are considering working with a personal finance advisor, choosing a provider that understands your circumstances, clearly explains its services and costs, and operates within the appropriate regulatory framework is an important first step.

Frequently Asked Questions

What does a personal finance advisor do?

A personal finance advisor helps individuals make informed financial decisions based on their circumstances and goals. Depending on their scope, they may provide advice on investments, KiwiSaver, insurance, mortgages, retirement planning, and broader financial strategies.

Is a personal finance advisor the same as a financial advisor?

The terms are often used to describe professionals who provide advice about an individual’s finances. In New Zealand, however, regulated financial advice is subject to specific licensing, registration, and conduct requirements.

How much does a personal finance advisor cost?

Costs vary depending on the adviser, the services provided, and the complexity of the client’s circumstances. Advisers should explain how they are paid and disclose applicable fees and costs.

When should I hire a personal finance advisor?

You may consider professional advice when making significant financial decisions, such as buying a home, investing, planning for retirement, reviewing insurance, or managing a substantial change in your financial circumstances.

How do I check a personal finance advisor in New Zealand?

You can check the Financial Service Providers Register to confirm an adviser’s registration and identify the Financial Advice Provider they are engaged by.