Whilst a stock market education firm's licence does not permit them to give investment advice (personal financial product advice), it is something we are frequently asked to provide.

HomeTrader provides an alternative to investment advice (also known as personal advice). Instead we teach you how to develop your own trading system, to make your own decisions, with your own money and be free of investing advice from others. This is called the provision of general advice.

What follows is an explanation of personal advice and where you can go to obtain it if required.

A financial adviser is one who provides personal advice and manages and provides investing advice, for a fee. The fee is typically calculated as a percentage of assets under management annually or a fee for each individual transaction.

In Australia, personal advice can only be given by companies (and their representatives) appropriately licensed by the Australian Securities & Investments Commission (ASIC).

Common examples of financial advisers include financial planners and stockbrokers.

The vast majority of stockbrokers provide investment advice and take orders for the sale and purchase of shares and other financial products.

The most comprehensive study to date has come from an ASIC/Australian Consumers Associations (ACA) shadow shop survey of financial planners. The results of the last national survey, released in early 2003, exposed woeful standards of advice in the firms surveyed. It followed an earlier joint survey in 1998 that also reported standards were poor.

In the last survey, only two financial plans out of a total of 124 were considered "very good". Sixty-three plans (51 per cent) were graded "borderline" to "very poor". The report found that "The advice given often seemed like thinly disguised product selling."
John Collett October 6 2004 The Sydney Morning Herald & The Age

In addition, the Australian Stock Exchange has criticised the stockbroking industry for not adopting a tougher approach on the controversial issue of independent analyst research, citing concerns that some share recommendations seemed biased.
The Australian Financial Review 16/04/05

HomeTrader suggests that as part of your research on investment advisers, you investigate all avenues and that you consider getting stock market education to take control of your own future.

If you do want to take advice from a financial adviser, we suggest you read the "Getting Advice" guide provided from ASICs Financial Tips and Safety Checks (http://www.fido.asic.gov.au).

Here's our top 7 tips:

1. Deal only with a licensed financial services business

2. Pick the adviser with the strongest qualifications, experience and integrity

3. Ask questions until you really understand

4. If you feel uneasy, it's OK to walk away

5. Make sure your financial plan suits your needs and personality

6. When you get a good plan, stick to it

7. Keep all your paperwork