Choosing a financial adviser

How to go about choosing a financial adviser, and some of the things you need to watch out for

Young happy couple came to an agreement with their insurance agent on a meeting in the office. Focus is on young man shaking hands with agent.

Choosing a financial adviser

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You’ve worked hard for your money, but if you want to make sure it’s working as hard as it possibly can for you, you may need to enlist the help of a financial adviser.

If you’ve got plenty of time available and are comfortable monitoring and managing your money matters, you might decide you’re quite happy to go it alone. However, often big life events, such as retirement, inheriting a lump sum, or going through a divorce, trigger the need for expert advice.

Here, we explain how to go about choosing a financial adviser, and some of the things you need to watch out for.

Where can I find a financial adviser?

Personal recommendation is often the best way to find an adviser. Ask friends and family if they’ve used a good adviser, but always check that they are properly qualified and regulated first. You can do this by checking the Financial Conduct Authority’s Financial Services Register.

Alternatively, the financial advice trade body Unbiased.co.uk has a network of 27,000 advisers. You enter your postcode and it will come up with advisers in your local area, or you can search according to the specific area you need advice on.

The website Vouchedfor.co.uk has more than 5,500 advisers listed and if you complete a brief form on the home page you will get a free 30-minute financial health check from one in your area.

Are there different types of adviser?

Yes, the two main types of adviser are restricted and independent.

If an adviser is restricted, they are only can only recommend certain products to you, or products from specific advisers, so you should clarify exactly what they can and can’t help you with before proceeding.

If the adviser is independent, then they can offer you advice and products from across the whole of the market and from any provider.

What qualifications should an adviser have?

By law, financial advisers must have a qualification called the Qualifications and Credit Framework (QCF) Level 4, but they may have specialist qualifications if they offer certain types of advice.

Every individual financial adviser who sells investment products must also have what’s known as a current Statement of Professional Standing, which shows they’ve signed up to a code of ethics and completely professional training every year.

How much will advice cost?

That depends on the extent of the advice you need and the size of your assets. According to Unbiased.co.uk, advisers usually charge between 1% and 2% of the assets involved. So, for example, if you want advice on a pension pot valued at £150,000, they’d typically charge you from £1,500 to £3,000.

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Other advisers may charge a fixed fee for their work, or they might charge by the hour. Your adviser should always tell you their fees up front, so you know exactly how much you’ll be paying.