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What are the different Types of Financial Advisers?
AUTHORISED FINANCIAL ADVISER (AFA)
Can provide a personalised advice service which includes complex financial products (Category 1 products), such as KiwiSaver, Shares, Bonds & managed funds. Is authorised by the Financial Markets Authority by demonstrating minimum qualification levels, passed a series of tests, belongs to a disputes resolution service and registered on the FSPR. Further an AFA is subject to ongoing professional development requirements (to evidence their continued education and skill level in their profession)
REGISTERED FINANCIAL ADVISER (RFA)
Can provide personalised advice on non-complex financial products (Category 2 products). E.g Cash and Term Deposits, Mortgages & insurance. The RFA is registered on the FSPR (Financial Services Provider Register) and must belong to a dispute resolution body. There is no requirement for evidencing education, or further development. A person can be a car dealer one minute, and a Registered Financial Adviser the next.
QUALIFYING FINANCIAL ENTITY (QFE)
A QFE adviser is usually someone who works for a big financial institution. They can provide personalised financial advice on their own non-complex financial products.
OTHER FINANCIAL ADVISERS
Some other financial advisers such as accountants can provide advice on financial products as long as the advice service is incidental to other things that accountant is doing for the client. Most accountants I know try to stay away from this type of advice, because they get caught by the rest of the legislation around providing this type of advice.
What's the difference between Personalised and Class Advice?
Personalised advice is where you receive advice from a financial adviser, and that adviser has either:
taken into account your total financial situation, including your goals, attitudes towards investment risk, and then provides you with written advice appropriate to your unique situation OR the client would reasonably expect the financial adviser to do so in the scope of the advice they are receiving.
Class advice is everything else that is not personalised, including seminars, articles and any other general information.
How much will this all cost?
Because we are paid commission on mortgages and insurance packages we facilitate, there is no cost to you.
(The commissions are all similar across providers, which means we have no bias - we put your best interests first, always.)
How much can I borrow for a residential property?
Mortgage lending depends on a number of factors and there is no easy answer to this. It also depends if it will be your own home or an investment. We will work with you to understand your objectives and provide a strategy to achieve that.
How much deposit do I need to buy a house?
There has been a lot of confusion over this topic since the Reserve Bank brought in Loan to Value ratio restrictions. Some providers continue to offer low deposit mortgages from 5% of the property value, however this depends on how many low deposit loans they have done recently. The rules are that banks have to keep low deposit loans to a maximum of 10% of all of their loans approved over a certain period.
If you meet first home buyer criteria, you may be able to get a mortgage with only 10% deposit - see this link for more information about first home buyer criteria
If you have a 20% deposit and you meet all other mortgage lending criteria, you are like gold to finance providers - they will all be chasing you and offering you significant sweeteners. Talk to us about who can offer you the best mortgage deal.
Can I refinance my current mortgage?
Yes you can. We will work with you to help you get the best deal available out of all of the major providers and recommend a mortgage structure that works for you.
How much insurance should I get?
We will always recommend the most appropriate level of cover for you and your family - to ensure that in the event of a catastrophe there is a plan B to protect you all! We can you through a range of 'worst case' scenarios, so you have complete control of the type of insurance cover you feel comfortable with.
Do I have to get insurance?
If you are getting a home loan then yes, you will need to have House Insurance, this will be a requirement from the bank. But no, you don’t have to have Life Insurance, Income Protection Insurance or any other insurance! Although it is not a requirement, we do highly recommend insurance to protect you and your family. As insurance brokers, we can put together a plan for you, just contact us and let's chat! Our insurance broker services are completely free.
Have another question?
We're here to help - and our advice will cost you nothing. Just call or email us and ask away!