There are a frightening number of financial scams around. Thousands of people have lost life-changing sums by putting money into schemes that claim to be investments but are frauds.
Before you embark on any serious investment you should find good financial advice. Here are my rules.
ARE THEY INDEPENDENT?
Only ever use an independent financial adviser.
Sadly, these are becoming rarer, as good IFAs are being tempted by offers to give up their independence and work for a big firm where the advisers are only allowed to recommend a limited range of products that are often expensive and poor value.
You can easily tell if an adviser is independent: ask them!
If they say anything other than “yes” then they are not.
Of course, not all restricted advisers – as the alternative is called – are bad. They may be very good. But they are, as their name says, restricted.
ASK FOR A PLANNER
The best qualified advisers are chartered or certified financial planners.
They often prefer that term to IFA, which they think has been tainted by people (including many journalists) using it as a short-hand for any financial adviser.
They have the top qualifications and, having put a lot of time, effort, and money into getting their qualification, are unlikely to abuse it.
PAY A FEE
Some advisers still charge you a percentage of the money you trust them with.
It’s a bit like a private wealth tax. Try to find one who charges you a fee for what they do. Then if you want a change it’s easy to find someone else.
Never trust any adviser who only charges you if you take some action – for example, moving money out of a good company pension. These so-called contingent fees are a conflict of interest and should be avoided.
My preference for a search engine is now www.adviserbook.co.uk.
It lists all the regulated advice firms – 12,000 of them – and you can apply my three filters: independent, planners, fees. Visit two or three and see who you like – the first visit should be free.
Always go to their office rather than them coming to you. Make sure you are happy with their approach – and their fees.
Radio Times readers can get a free financial health check with an independent adviser from Vouchedfor