One of the big questions when considering bringing onboard a Financial Adviser is:
‘How do I know they are any good?’
While a large amount of the decision will have to be based upon personal judgement. There are 5 things that you can do to help narrow down the search:
Check they are Authorised
You need to make sure they are an authorised and regulated individual if you want help with any regulated area such as with investments and pensions. This may sound obvious but any regulated individual has to not only be adequately qualified but there is also a big difference in what they are offering you. They are accountable for their advice as you could potentially have recourse should it not be suitable. This simply means that apart from just saying they are accountable for their advice, they will also be to the regulator.
The first port of call is to make sure they are fully regulated. You can check the FCA Register - HERE.
2. Check their Qualification Level
Qualifications alone do not make a good adviser. However, they do help identify 2 things:
Their competence
Their commitment to the profession (it takes quite some time to get Chartered and it requires a minimum of 5 years experience)
The minimum level for advising in the UK is what is called the Level 4 Diploma. While there are some excellent advisers who are at this level alone, it is the entry level. There are various professional bodies such as the Chartered Institute, The Chartered Institute for Securities and Investment and the London Banking Institute.
Frankly, you can spend your entire career collecting qualifications from different bodies (guess what, they all charge their own fees!) The reality is it doesn't really matter which professional body your adviser is qualified as but the 'gold standard' qualifications are:
Chartered.
CFP (Certified Financial Planner)
My answer: I am a Chartered Financial Planner with the Chartered Insurance Institute.
Watch out for this! - Don't just take your adviser's word for it. Check! Same with them being independent. These are straightforward answers which you need to know. See below for how to do this with the Chartered Insurance Institute and the Chartered Institute for Securities and Investment.
Chartered Insurance Institute - member search
Chartered Institute for Securities and Investment - member search
3. Understand their experience working with clients like you
You are unique but chances are your circumstances aren’t. Most people work through life-stages and having someone who has worked with clients in your position is an advantage. If you are coming up to retirement. It would be ideal to work with an adviser that has experience working with retirees. If you are exiting a business and need advice on this. Ask your adviser if they’ve had experience in this before.
Watch out for this! If the adviser already has a large number of clients, you need to ensure you’re not going to be ‘another number’ or ‘bottom of the pile.’ The ideal position is to pick an adviser who has experience in dealing with clients who have issues and can give you the time and focus you deserve.
4. References
It is a tried and tested way but if there are any reviews then you can use that as a bit of ‘social proof’ that helps. This is the same reason why referrals tend to be one of the most consistent forms of business for Financial Advisers.
There are comparison sites that can provide a decent place to start such as AdviserBook, VouchedFor and Trustpilot. Although it’s always important to do your own due diligence and make sure you alone make the final decision based on all the factors at play.
My answer: You can see our Trustpilot reviews here and and my VouchedFor here.
5. Understand the service they are offering
Service propositions differ a great deal between advisers. One big question is 'what will you get?' You should rightly expect competent advice in whatever area you need advice in but are they going to:
- Include full cash flow planning so you can visualise your future and make any course corrections?
-Consider all areas of your life (holistic planning)?
-Look at tax optimisation strategies to save you tax?
-Do this all on a fully independent basis?
It’s important to note that a financial plan is an ever-changing document. That is why you want to be sure that there is an ongoing arrangement for the financial plan to be maintained and updated as your life changes.
Otherwise, it could become a very expensive doorstop!
