How To Choose A Financial Adviser: Finding The Right One

Written by Fraser Stewart
Reading time 5 minutes
How To Choose A Financial Adviser: Finding The Right One image

Choosing the right financial adviser is crucial to creating a sound financial future. This choice is about more than just money; it's about your dreams, aspirations, and the life you envision for yourself and your loved ones. With the proper guidance, you can navigate complex financial landscapes, make informed decisions, and build a solid financial foundation. 

Highlighted in the Daily Express, we emphasised the significance of Independent Financial Advisors (IFAs) as critical enablers for astute financial decision-making and future planning. Yet, our studies indicate a notable delay in long-term financial strategies among UK citizens. IFA guidance can help to establish solid foundations for the future. While a prevailing stereotype suggests financial planning is exclusive to the affluent, we firmly believe this is a crucial consideration for everyone.

This comprehensive guide provides the insights you need to select a financial adviser who aligns with your needs and can help you achieve your financial goals.

Understanding Your Financial Needs

Identifying the type of advice you require is the first step in this journey. The nature of your financial goals will inform the kind of financial advice you seek. Whether you're planning for retirement, seeking investment advice, searching for a suitable mortgage, aiming to keep your taxes in order, or just looking to keep your finances on track, understanding your needs will lead you to the right adviser. Take time to reflect on your financial goals and circumstances. 

For instance, do you have specific financial targets? 

Clarifying your financial needs will help you determine whether you need a financial adviser and, if so, what kind of adviser you need.

How to Find a Financial Adviser

While personal recommendations can be valuable, you don't have to rely on word of mouth alone. Several online resources can help you find a qualified and reliable financial adviser:

A comprehensive platform offering a directory of independent financial, mortgage, and pension advisers in the UK. The site helps users find and compare professionals based on their qualifications, customer reviews, and specialities.

A UK-based website that provides listings of pre-vetted financial advisers, mortgage brokers, solicitors, and accountants. It supports consumer decisions with detailed adviser profiles, user reviews, and a transparent rating system.

Financial Conduct Authority Register

Additionally, the Financial Conduct Authority's (FCA) Register is a reliable resource to confirm an adviser's authorisation and credibility.

Types of Financial Advisers

UK financial advisers are categorised by their areas of expertise, otherwise known as their specialisms. They might be known as 'mortgage advisers', 'investment advisers', 'pension advisers', or 'financial planners'. Understanding their categories and specialisations is crucial.

Investment Advisers

Investment advisers specialise in guiding clients on investment decisions. They provide advice on investments, pensions, and retirement income products. They can also offer holistic financial planning advice, considering all aspects of your financial situation. Some investment advisers may advise on protection insurance and, in some cases, mortgages. If you're considering investing, an investment adviser might be your best option.

Mortgage Advisers and Equity Release

Mortgage advisers specialise in providing advice on mortgages. If you're buying a home or remortgaging, a mortgage adviser can guide you through the process, explain the various types of mortgages available, and help you choose the one that suits your needs best.

Mortgage advisers who recommend equity release products must possess a specialist qualification in equity release. Equity release can be complex, and getting advice from a qualified professional is crucial. Some mortgage advisers can also advise on protection insurance like life insurance.

Insurance Advisers or Brokers

Insurance advisers or brokers specialise in providing advice on various types of insurance, including general insurance like home, car, and travel, as well as protection insurance like income protection, critical illness, and life insurance. If you're looking for advice on any insurance, an insurance adviser or broker could be the right choice for you.

Pension Advisers

Pension advisers specialise in pension planning and retirement strategies. They provide advice on saving effectively for retirement, investing your pension pot, and the best way to draw income in retirement. If you're planning for your retirement, a pension adviser might be your best option.

Independent Financial Advisers (IFAs) vs Restricted Advisers

Understanding the difference between independent financial advisers (IFAs) and restricted advisers is also essential. IFAs are free to advise on products from the whole market, meaning they can consider a wide range of products and providers to find the best solution for you.

On the other hand, restricted advisers can only advise on specific products or providers. They might be limited to a particular range of products or providers, or they may only offer advice in specific areas.

Restricted advisers may also be known as 'tied' if they work for a particular provider, such as a bank or building society. Tied advisers often earn a commission for selling products to customers. Understanding the distinction is essential as it can impact the motivations behind the adviser's recommendations.

Qualifications and Regulations

The Financial Conduct Authority (FCA) regulates all financial advisers in the UK. Advisers must have achieved at least a Level 4 qualification in financial advice. Some advisers also hold additional qualifications, like Chartered or Certified Financial Planner statuses. These are advanced qualifications that demonstrate a higher level of competence and professionalism.

Understanding Adviser Fees

Financial advisers charge for their services in various ways. These can include fixed initial and ongoing service fees, hourly charges, a percentage of assets invested, a proportion of tax saved, or product commissions on non-regulated tax shelters and insurance products. It's essential to fully understand an adviser's charging structure before agreeing to their services. Be cautious of fees based on a percentage of your capital, as these can quickly consume a significant portion of your investment returns.

Choosing the Right Adviser for You

Choosing the right financial adviser involves more than finding someone with the right qualifications. It would be best if you found an adviser who understands your financial needs and goals and with whom you feel comfortable discussing your financial affairs.

Consider getting personal recommendations or contacting multiple IFAs to compare their services, fees, and approaches to financial planning. Consider having an initial meeting with each, and decide who meets your requirements and who you believe will provide the best advice and service.

Regular Reviews and Evaluations

Once you've chosen a financial adviser, you must review their performance and reassess your financial goals regularly. A good adviser will meet with you regularly to review your financial plan, adjust as needed, and ensure you're on track to meet your financial goals.

What if Something Goes Wrong?

If you're unhappy with the advice provided by your financial adviser, or if you believe a product has been mis-sold to you, you can make a complaint to the Financial Ombudsman Service (FOS). They can investigate your complaint and, if necessary, require the adviser to pay compensation. To get in contact with the Financial Ombudsman Service (FOS), you can call 0800 023 4567 or visit their website

In the worst-case scenario, if your adviser goes bust, the Financial Services Compensation Scheme (FSCS) can compensate up to £85,000 of eligible investments per person per product.

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