Finding the right professional who we can trust with our pensions, family finances and savings is like recruiting a specialist to fill a role in a business – but few of us think that way.
Hiring a financial expert at work would involve a lengthy and detailed process of applications, interviews and reference checking before deciding on who to appoint.
So why not impose the same discipline on the person you are entrusting with your family finances?
The working relationship is probably even more important to you personally. After all, the adviser you select will probably help you for years, so it is important to find the right person to suit your needs.
With that in mind, here are some important points to bear in mind when selecting the best financial adviser.
Not all advisers are equal
There is an astonishing array of levels of qualification. The first point to consider is if the adviser is independent or a tied agent.
- An independent financial adviser –often called an IFA – should select the best products and services to suit a customer’s needs from any provider. An IFA should give unbiased advice and give a written explanation personalised to you about why they have made their recommendations.
- A tied agentworks who works for a bank or provider and can only give advice about the employer’s products or services and is not obliged to tell you about those offered by competitors.
- A multi-tied agentis a step up from a tied agent. They can offer products and services from a limited range of providers, but not the whole market like an IFA.
Only IFAs can call themselves ‘independent’, so a clue is in the name. If they don’t say they are independent, then the advice they can give is restricted.
IFA qualifications
Then, within each category of adviser comes different levels of qualification.
For example, some advisers can only discuss run-of-the-mill financial services and cannot cross the line to talk about investment strategies, recommend funds or discuss regulated products.
To complicate matters, some firms may offer advise about different products as IFAs or multi-tied agents, such as insurance from the whole of the market but mortgages from selected providers.
The recognised providers of qualifications for a financial adviser are:
- Chartered Insurance Institute
- Personal Finance Society
- The London Institute of Banking and Finance
- Chartered Institute of Bankers in Scotland
- CFA Society of the UK
- Chartered Institute for Securities & Investment
- Institute of Financial Planning
- Pensions Management Institute
- Scottish Qualification Authority
To check if your adviser is regulated, go to the FCA web site
