Choosing a Financial Adviser

Choosing a Financial Adviser

Choosing a financial adviser might seem daunting, but if you need help with a financial decision, it’s well worth persevering. A good adviser can save you money and a lot of worry.

What’s in this Guide

  • How to find a financial adviser
  • Types of adviser

The key to finding the right financial adviser is knowing what type of advice you need. For example, are you:

  • Looking for help with investing into your pension or a Stocks and Shares ISA?
  • Coming up to retirement or navigating your way through it?
  • Looking for a mortgage or perhaps life insurance?
  • Simply looking for help with keeping your finances on track and meeting your long-term goals?

There are lots of reasons why people need advice from a financial adviser. But there are also lots of different types of advisers, so it’s important to know who to go to and when.

How to Find a Financial Adviser

Personal recommendation from friends or family is one way to find a financial adviser. But even if you get on well with an adviser, it’s hard to judge in the short term how good a job they’ve done.

Some unions, affinity groups, and workplace pension schemes have selected advisers to recommend to their membership. If you’re a member of one of these groups, check with them first.

Types of Adviser

Financial advisers aren’t always called ‘financial advisers’. Instead, they’re sometimes named by their specialism, such as ‘mortgage adviser’, ‘investment adviser’, ‘pension adviser’, or ‘financial planner’. Sometimes, they are known as ‘brokers’ – often when dealing with products such as:

  • Mortgages
  • Home and car insurance
  • Investments, including shares

All financial advisers in the UK are regulated by the Financial Conduct Authority (FCA). This means there are rules they must follow when dealing with you. You can check if the adviser is on the Financial Services Register, which lists the firms and individuals regulated by the FCA. Contact the FCA by phone on 0800 111 6768 (freephone).

There are minimum qualifications that all regulated financial advisers need to have achieved. Most will have achieved benchmarks above that, such as the Chartered Financial Planner or the Certified Financial Planner qualifications. They might also have specific qualifications covering the areas they specialise in, such as long-term care, equity release, and pension transfers.

Most advisers will offer you a free initial meeting. This gives you the chance to get a sense of whether you’re comfortable with them and how they work. Any properly qualified adviser will show you their certificates if you ask them to.

Advisers Who Deal with Investments

This includes:

  • Investments
  • Pensions and retirement income products
  • Holistic financial planning

Advisers may also have a specific qualification to advise on pension transfers. Advisers recommending these types of products must carry higher levels of qualifications and can’t receive commission from the products they sell. Instead, they charge a fee for the advice they give, but there might be different options for how you pay the fee.

Advisers who provide advice on the products listed above might also provide advice on protection insurance (such as life insurance) and sometimes mortgages. Many offer holistic financial planning, where they’ll advise you on all aspects of your financial needs. Advisers in this category are classified as either independent or restricted.

Restricted advisers might either be restricted in the type of products they offer, the number of providers they choose from, or both. Independent financial advisers (IFAs) can recommend all types of retail investment products and pension products from firms across the market without restriction. You might want to consider choosing an adviser who can deal with a wide range of product providers for the product they are recommending – and not just one or two. That way, you know you’ll be getting the widest choice.

But the quality and suitability of the advice shouldn’t be affected by whether you decide on an adviser who can advise on all the market or one who’s restricted to one or more providers. Make sure you understand the type of service they offer before you decide whether to get advice from them. That includes the cost of the advice and the method of charging.

Advisers Who Deal with Mortgages and Equity Release

Mortgage advisers must have specific mortgage qualifications. Advisers recommending equity release products must also have a specialist qualification in equity release. These advisers are still allowed to be paid by commission on any mortgage or equity release product they sell. Some mortgage advisers also charge a fee for their services.

Many mortgage advisers can also advise on protection insurance, such as life insurance. Mortgage advisers might offer a whole-of-market service. Although this won’t necessarily mean they can recommend any mortgage from every lender, as some lenders only offer mortgages direct to the public.

Some mortgage advisers offer ‘restricted’ advice and might be tied to just one lender or might only be able to choose from a small number. An ‘independent’ mortgage adviser will be able to offer a broader range of options from across the whole of the market.

Appointed Representatives

Sometimes advisers work as ‘Appointed Representatives’. This means they can give you regulated advice on behalf of another firm, known as the principal firm. The firm checks they are suitable to do these activities (what they sell or arrange for you, or the advice they give you).

You’ll be protected if things go wrong with the activities the principal firm allows their representative to do. But you may not be covered for other activities. So it’s important to check if your adviser is an Appointed Representative and find the contact details for their principal firm by checking the Financial Services Register or contacting the FCA; you can call on 0800 111 6768 (freephone).

Paying a professional to help you make more money may seem a little counter intuitive but one should look at the expense as a investment rather than an expense. Our webmaster Julie Smith searched for a financial advisor in central coast nsw when she lived in Australia and now pays regulary for advice and financial checkups – “Taking the step to hire a professional to help me with my finances was daunting to me at the start, but the advice I received has covered the cost several times, and the peace of mind with making correct financial decisions is priceless!”.

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