1 What is financial advice?
Like many things in the world today, financial products such as investment bonds and other collective investments are available over the internet, via faceless, information-only services.
This information does not constitute advice and should the outcome prove unsuitable, you have little or no come-back. Advice, whether face-to-face or over the phone, is when a qualified adviser makes a recommendation as to the suitability of a financial proposition. This gives you peace of mind and the greatest protection should anything go wrong.
2 Independent or restricted?
Is your adviser tied to only a small selection of providers or product types? Only a fully independent adviser can search the entire market to find the right solution for you. Financial advisers are legally required to provide you with information about the scope of their services at the beginning of your relationship.
3 Who needs an adviser?
We no longer trust the banks, so who can we trust with our money? Whether it’s a lack of knowledge or simply a lack of time, an adviser can help anyone, rich or otherwise, understand their financial situation. Unfortunately we tend not to think about our finances until it is too late. Perhaps a loved one dies without any life insurance or an elderly relative reaches retirement without having made sufficient pension provision. Nobody wants Aunt Mavis living on the streets (or worse still, on your sofa) because she didn’t bother to put enough away for her retirement!
4 Aren’t they expensive?
“Price is what you pay, value is what you get”. This is an investment truism and very appropriate when you consider what an adviser can do for you and your family. Financial advice is no more expensive than solicitors’ fees or accountancy charges. Even better, if a recommendation is made, fees can often be built into the overall cost of the product and paid over a period of time. For example, by saving a regular amount each month, the cost could be taken from each payment, meaning you don’t part with a lump sum upfront.
5 How do I find a good one?
There is no sure-fire way to find a good adviser. But, similarly to finding an accountant or solicitor, having one recommended by a friend or family is certainly a good start. Alternatively, www.unbiased.co.uk can help you search for qualified advisers in your area.
• Giles Robinson is a financial planner at Melville Independent