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Many investors use multiple financial advisers. To Kiwis that will sound surprising. After all, Why would I need 2 people giving me advice on my finances?”

And the reason is that financial advisers specialise in different areas.

But if you are working with 2+ advisers, what happens when they give you conflicting advice? Who’s right and who’s wrong?

In this article, you’ll learn why some advisers will give different advice, and 4 steps you can use to figure out what the right move is for you.

What is a Financial Adviser?

A financial adviser is a professional who can help you make decisions on your finances. That means planning for retirement, buying insurance, getting a mortgage, or deciding what to invest in.

In New Zealand we tend to use a blanket term for all financial advisers.

And while any adviser can talk to you generally about your money, in reality every adviser specialises in one or two specific areas or strategies.

For instance, a financial adviser could specialise in any of the following:

  • Budgeting – helping you manage your money
  • Investments – focused on managed funds, KiwiSaver, property investments, direct holdings
  • Mortgages – for investors and homeowners
  • Insurance – including personal and business
  • KiwiSaver – finding the right provider, switching to a more suitable scheme and risk profile

And that’s the reason many investors will have multiple advisers – e.g. a mortgage broker, and an insurance broker, and a property adviser (that’s us here at Opes Partners).

So what happens when two of your advisers say different things? Let’s walk through an example of how different advisers can result in conflicting advice.

Financial Advice #1 – Working with Hannah McQueen from EnableMe

Let’s say Bobby, an engineer in her late-20s who owns her first home, engages the help of EnableMe to get budgeting advice. Bobby’s got a mortgage and some student loan debt she wants to pay off more quickly.

Bobby talks to Hannah McQueen, of EnableMe, who specialises in budgeting (and Hannah is on our top 10 list of financial advisers in NZ).

As part of Hannah’s service, she would analyse what Bobby is spending money on and she might suggest Bobby spend less in order to pay down her mortgage more quickly.

As part of EnableMe’s strategy they tend to focus on paying off your mortgage before investing in other assets.

Financial Advice #2 – Working with Andrew Nicol from Opes Partners

But now let’s say, after working with Hannah for a few years, Bobby is now interested in planning for her retirement. And she wants to stop working well before 65.

To do this she is interested in purchasing an investment property. She’s been reading Wealth Plan, and wants to start growing her wealth over the long term.

Because she’s owned her first home for a while she’s got a bit of equity built up to lean on for the deposit.

So, Bobby books an appointment with Andrew Nicol, of Opes Partners (that’s us), who are also financial advisers, just like Hannah and EnableMe.

Andrew helps Bobby identify a 2-bedroom townhouse in Christchurch that she’d like to purchase as an investment.

But before she signs the contract she wants to run this decision by her other financial adviser. Here’s where things get interesting.

“My two advisers are saying different things”

Bobby is likely to hear her two financial advisers say different things.

Financial Adviser #1 (Hannah from EnableMe) would likely say: “Your goal is to pay off your mortgage first. We need to stick with that strategy and pay down debt”

Financial Adviser #2 (Andrew Nicol) might say: “Your goal is to retire early, you need assets outside your main home so you can use them in retirement. It’s time to invest”

Both advisers (Hannah and Andrew) are well-respected in the industry, qualified to give financial advice, and have Bobby’s best interests at heart. So how does she figure out who to listen to?

Hint: Listening to Andrew Nicol, of Opes Partners, may not be the right answer (and yes, you are on the Opes Partners website!)

The 4 steps to work through conflicting financial advice:

In the example of Bobby, it can be easy to think: “So, who’s giving the wrong (or bad) advice?

But the answer is: neither. Both financial advisers could be right.

In order to resolve this conflict, Bobby can work through these 4 steps:

Step #1 Be really clear on your goals

The first question to ask yourself is: “What is my main goal. What’s more important to me?”

Because if you do invest in a property you will likely need to “top it up”, which means you need to regularly pay $100 into the property’s bank account (for example).

That means there is a genuine trade-off between investing in property and paying down your mortgage more quickly. On top of that, you’re taking on more debt, compared to getting out of it.

So what is more important to you? Is it:

The answer to this will come down to your personal circumstances.

For example, Bobby (who was in her 20s) might be more focused on getting out of debt, since retirement could be far away and not on her mind.

But, if she wants to stop working earlier, growing a property investment portfolio (and living with debt for a little longer) could be the way to go.

Whatever she decides she should be really clear with both financial advisers about what her ultimate goal is because the advice will be different based on what you tell them your goal is.

In the above example, Adviser #1 (Hannah) thinks the main goal is getting out of debt. Adviser #2 (Andrew) thinks the main goal is building an investment portfolio.

The advice is different because the advisers are working on different goals for Bobby.

Step #2 Understand the specific strategy the financial adviser implements

To be clear, just because you have 2 different financial advisers telling you 2 different things, doesn’t mean one of them is wrong.

In our earlier example, neither Hannah nor Andrew is giving Bobby bad advice, it’s just different advice because each financial adviser helps implement different strategies.

For example, here at Opes Partners we specifically help Kiwis invest in property.

This often means borrowing money against your house (going into debt) and making a financial top-up on those properties.

The strategy is that these properties go up in value, and then you use the money to live a more comfortable life in the future.

The way we view investment is different from some other companies.

To take a different example, if you were to approach a company that specialised in shares and funds they would give you advice on shares and funds. Others will focus on paying down debt first (and that might be their strategy).

The key thing for you as the investor is to decide whether you need more property, or more shares, or less debt in your portfolio at the time.

So Bobby’s second step is to understand where each adviser is coming from by looking at the strategies they tend to recommend.

Step #3 Get both financial advisers talking to each other

Some times investors trip up because they ask one financial adviser for an opinion. Then they ask a second adviser for their opinion.

Then they go between the two, talking about what the other person has said. For example, Bobby might say, But Andrew Nicol told me X, Y, Z.”

This doesn’t often lead to a good outcome.

Rather than being the mouthpiece between each party, it can help to get both of your advisers talking to each other so they can get on the same page and help you make an informed decision.

Investors tend to be very unsuccessful when they go back and forth between advisers. It leads to inaction.

While we can’t speak for all advisers, here at Opes Partners, if an investor is working with another financial adviser we are very happy to sit down with all advisers and the investor to help understand what’s best for them.

Step #4 Understand each financial adviser’s motivations

Without being too cynical, it’s important to understand how your adviser is getting paid. Because often there are conflicts of interest.

For instance:

  • Is it because Adviser A also offers a property investment service and wants you to use that instead?

That does actually happen.

Another question to ask is does your adviser have a vested interest in your money?

For instance:

  • Let's say you’re investing in shares and currently invest $500 a week into a managed fund through Adviser A
  • You then talk to Adviser B and are interested in investing in a property. Doing that means you’ll stop putting $200 a week into the fund and will put that towards the property instead

In this situation, Adviser A will likely get a fee for any money you put into the fund. So they have an incentive for you to continue putting your $500 a week into the fund.

Adviser B, on the other hand, will likely get paid a fee if you buy an investment property, and put $200 a week towards the property instead.

Both have conflicts of interest, which is normal when using a financial adviser.

To be clear, we aren’t saying financial advisers are biased … but it’s really important to understand how the world of financial advice works. This will help you become a balanced and informed investor and you’ll be able to make a judgement call yourself.

For more, read this article on Are property coaches biased?

What advice should I take?

Ultimately, as much as you can get financial advice from lots of professionals … you, as the investor, still have to make a decision.

So, Bobby will ultimately need to decide which advice she wants to go with. She can still work with both advisers, but if they are saying different things Bobby will need to make a decision. And working through these 4 steps, will help her make that call.

Opes Partners
Laine 3 001

Laine Moger

Journalist and Property Educator with six years of experience, holds a Bachelor of Communication (Honours) from Massey University.

Laine Moger, a seasoned Journalist and Property Educator with six years of experience, holds a Bachelor of Communications (Honours) from Massey University and a Diploma of Journalism from the London School of Journalism. She has been an integral part of the Opes team for two years, crafting content for our website, newsletter, and external columns, as well as contributing to Informed Investor and NZ Property Investor.

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