How To Choose A Financial Adviser
Published / Last Updated on 13/10/2023
Which Financial Adviser? Tips on how to choose the right financial adviser when financial advice itself can be overwhelming anyway.
You would not give your personal and financial information to just anyone. It is likely that even your family or your best friend does not know how much money you have in the bank, how much you earn or what your plans are for retirement. Therefore, you should take care when drawing up a shortlist and then choosing your financial adviser.
Shop Around
You may shop around online – but has the adviser got a good web team that optimises its website to appear at the top of the search result or indeed it is a paid for advertisement. Do you research about the firm and look for online testimonials both on their website and from other source.
Use Professional Directories
We do not suggest you use paid for directories (one’s where the adviser has paid to be included in the listing or indeed pays each time they are supplied a ‘lead’. In short, your details have been bought, you have been ‘sold’ to the highest bidder. We suggest you use professional and regulatory directories such as:
- Financial Conduct Authority Register (FCA) (www.fca.org.uk) – make sure your adviser is authorised and regulated.
- Money Helper Service and Pension Wise service (www.moneyhelper.org.uk)
- Find An Adviser via the Personal Finance Society, part of the Chartered Insurance Institute, (www.thepfs.org/yourmoney/find-an-adviser/)
Directories may not be the whole solution, but they are a start to building a shortlist to find the right adviser for you offering the specialist help you desire.
Referral
Your friend, relative or colleague may give you details of their adviser. This may be good or bad news. The referrer may have a good relationship with their adviser, they may not. How do you know your friend or colleague did enough research? Did they get good advice? Are they paying too much for their advice? Referrals are good but still complete your own due diligence.
Directly Regulated, Network or Tied?
Is the adviser directly authorised with the FCA or are they linked to a network of advisers? Is the adviser tied to one platform or one pension/investment company? Are you going to get whole of market, independent financial advice?
Qualifications
We suggest there is an ‘alphabet soup’ of designatory letters and qualifications out there offered by different professional bodies. We suggest you look for Chartered Financial Planners and Certified Financial Planners (these are degree level qualified advisers). CeMAP, Cert. MP & ER or CertPFS mean your adviser has a certificate in mortgage advice, equity release or paraplanning (equivalent of an A level) or DipPFS (diploma just below degree). Look for designatory letters FPFS, FCII, APFS and ACII (these are fellows or associates i.e., degree equivalent members of professional institutes) and will usually be Chartered or Certified.
See: 4th Deadly Money Mistake Mistake 4 Qualifications and Our Qualifications Chartered
Fees
Many financial advisers charge a % upfront of your wealth (usually 2%-3%) plus an ongoing advice fee of say 1%pa. A small % of financial advisers (around 5%-10% of advisers) charge set fees based upon an hourly rate and risk that they take on. We charge set fees based upon core hourly works to complete a job plus a small % for the risk that we take on. If you adviser is not clear on exactly what they will charge you in £ figures then you have to ask yourself why they have been reluctant to tell you. Why should someone with a pension worth £100,000 pay double to their neighbour with £50,000 in their pension for the same work?
See our fees: Our Fees
Ongoing Advice Service
What ongoing advice services does the adviser offer? How much do they charge for ongoing advice? Do they charge a % of your wealth or set fees? Is there a list of all the services that they offer?
Trust
We suggest you need to feel comfortable with your adviser. Are they personable to you? None of us can get on with all people. Do they listen? Do they talk down to you? Do they use jargon? Do they take time to explain things? Are they punctual? Do they do what they say they will do in a timely manner?
