Good advice crucial to making good investment decisions

Finding the right investment adviser is no different to hunting for a reliable mechanic or a sympathetic doctor - there are no magic answers, but there are ways to improve your chances.

* Be forearmed: While it's tempting to leave everything to the experts, it's also tempting fate. Before talking to an adviser, read one or two basic investment books, such as those published by the Consumers' Institute, or work your way through the Retirement Commissioner's website (www.sorted.govt.nz) to get an idea of the types of investments you may be offered.

Do a little research on past investment returns, so you'll know if you're being promised anything outlandish.

* Quiz yourself: Ask what you want from an adviser. Is it just investment advice or do your finances need a total makeover?

Be clear on why you want to invest - to provide income you can live on, or to build up a fund for retirement? If it's the latter, how much longer do you want to work?

Will you need to get at the money in future, or are you happy to have it locked up for a certain time? Can you cope with the idea that your investment might lose value (almost certainly will lose value at times if you invest in shares)?

Gather the information you'll need - details of your earnings, debts, insurance policies and existing investments.

* Shop around: Ask friends for recommendations and approach two or three advisers for an initial consultation before making any commitment.

* Ask questions: Do the advisers belong to organisations such as the Financial Planners and Insurance Advisers Association or the New Zealand Stock Exchange?

Do they have any qualifications, such as the Certified Financial Planner or Chartered Life Underwriter titles? How much experience have they had?

Do they advise on all types of investments or just some? From many managers or just a few?

How do they expect to be paid - directly by you or by commissions? If you're paying directly, is there an hourly charge or a flat rate? Be sure you understand what the charges are in dollars, not just percentages.

Do the advisers or their firms have a financial relationship with a particular fund manager or other organisation?

What happens to any money you give an adviser - is it held in trust, or do you pay it directly to the investment organisation?

What's the procedure if you have a complaint?

Can they provide references from other customers?

* Be wary: It is a bad sign if an adviser steers you straight towards investments before trying to understand your financial position.

It's the same story if the adviser doesn't at least mention the possibility of paying off any debts rather than investing - for many people that's the best choice.

Be careful if you don't get a disclosure statement with the information you're automatically entitled to, or if an adviser doesn't respond to a request for the information which should be provided on demand.

Watch out for anyone who promises what seem to be high returns.

* Get it in writing: When you've worked out an investment plan, get it in writing, take it away and think it over before signing anything.

Ask for prospectuses for any investments the adviser recommends.

Ask yourself how well the plan answers the questions you were hoping to answer.

Ask whether there are cheaper ways of achieving the same thing, and be sure you understand the tax implications.