Explaining the services you offer

During the first consultation,you should explain what the property investment process involves and the services you can offer. The information presented and how you inform your clients will largely depend on them, but you do need to be aware of the need to inform clients of specific information. In particular, all fees and charges associated with any services you offer should be disclosed up front, including any commissions or soft dollar rewards which you may be receiving as a result of your recommendations.  Clients appreciate knowing how remuneration operates and this will give them confidence in your abilities and build trust early in the relationship.

Many advisors simply advise that their services are free if they are receiving commissions from other sources.  This may seem like a good strategy however, most people will realise that you must be paid somehow and if you do not disclose this to them, they may make their own assumptions about this, which may be worse for you.

The FSR regime prescribes quite specific disclosure documents that should be provided to clients. One of these is the Financial Services Guide (FSG) which describes the service provider, their services and fee structure. While the FSR regime is not binding on property advisors at the moment (as previously discussed in other modules), the Financial Services Guide provides a basis for the information that you as a property advisor should disclose.