Scaled or limited advice is typically focused on a single issue or question. It does not consider your overall financial situation and goals.
The problem with scaled advice is, as the financial adviser doesn't understand your complete financial situation, the recommendations they give might not serve you. They could even leave you worse off.
So why is scaled advice offered?
Some financial advisers argue that people want scaled advice. But they also know that this type of advice comes with disclaimers that protect them from the consequences of poor recommendations.
The argument is, that because their guidance is limited, you can't hold them to account for the financial impact of the advice they provide. This means there is limited recourse to sue them if something goes drastically wrong.
The truth is people typically ask for scaled advice because they don’t want to pay for full advice. But this is a false economy.
If you need advice, save up and get full advice from a trustworthy, independent adviser. Don’t waste a dollar on potentially risky, low value scaled advice.
Full, holistic, or comprehensive financial advice considers your entire financial situation and goals. It costs more than scaled advice because it looks at multiple issues all at once and is specialised to you. It can be very useful in creating a plan that meets your specific financial goals.
If your financial situation is simple, the advice might not cost much. If it is more complex it will and should cost you more. Whatever your situation, always ensure it is full advice you are receiving.
Full advice ensures the financial adviser understands your needs, documents their recommendations, and discloses all fees. This will help protect you if the adviser does not recommend an appropriate financial product or does not implement your plan correctly.
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General advice disclaimer
This is general information only and does not take into account your personal objectives, financial situation or needs. You should assess whether the information is appropriate for you having regard to your objectives, financial situation and needs and consider obtaining independent professional advice before making an investment decision. If information relates to a specific financial product you should obtain a copy of the product disclosure statement for that product and consider that statement before make a decision whether to acquire the product.