How to Choose a UK Financial Advisor
There will most likely be a number of times throughout your life when you feel unsure about what you do financially.
You might be coming towards the end of your life, nearing retirement, or you might have come into a lump sum of money, and you need advice on what to do with it.
The financial market is busier and more confusing than ever, which is why it is really important to get the right kind of advice from someone who understands the financial market and can put forward the very best options for you.
This is where a financial adviser comes in.
A professional financial adviser is able to help you with a number of different things, including being able to help you plan for your retirement, invest your money, tell you where to save your money or even tell you what to do if you come into a lump sum of money, such as an inheritance.
A financial adviser will also be able to help you if you are planning on buying a property with a mortgage or if you’re hoping to start a family soon.
A financial adviser will also help you if you are going through a divorce or if you have recently been widowed [1].
Below are all of the different types of financial advisers across the UK.
Types of Financial Advisers in the UK
There are lots of different umbrella terms for the term ‘financial adviser.’ Sometimes, they might call themselves a mortgage adviser, a mortgage broker, an investment adviser or even sometimes a pension adviser or financial planner.
Whilst these terms might seem confusing at first, they are all simply there to do one thing, and that is to help you with your financial circumstances.
Regardless of what they call themselves or what they do, all financial advisers across the UK are regulated by the Financial Conduct Authority.
The FCA set several rules for individuals and banks to follow.
When finding a financial broker to work with, you should always check to see that they are registered on the Financial Conduct Authority’s website.
This way, not only do you know that they are legitimate, but you also know that they work to a very high standard and have to follow all rules [1].
All financial advisers who are members of the FCA have to qualify as a Chartered Financial Planner or at least be certified as a financial planner.
They might also have additional, specialist qualifications in their specific area, such as equity release or pensions.
What questions should I be asking myself?
If you are considering getting a financial adviser, then there are a number of questions that you should ask yourself before you first reach out to anyone.
The most important thing to work out is what type of financial advice you need.
Below are some things to think about when considering what type of advice you need [2]:
- Are you looking for advice with your pension or your retirement in any way?
- Are you looking to buy a house or invest money in any way?
- Are you trying to save more money?
- Are you looking for life insurance?
- Are you looking to start a family any time soon?
- Are you likely to come into a large sum of money?
By thinking about the above questions, you should be able to work out what kind of advice you are looking for, and therefore what type of adviser you should contact.
How to find a financial adviser
There are a number of different ways to find a financial adviser. Most people choose a financial adviser by word of mouth, with friends or family often being able to suggest a recommendation.
However, there are also a number of other ways to find a financial adviser [3].
For example, unions often recommend financial advisers, as do financial societies and sometimes banks and lenders.
Below is a list of different directories, societies and other websites that might be able to either offer you financial advice directly, or will be able to recommend some financial advisers to you:
- The Personal Finance Society
- Unbiased
- Society of Later Life Advisers (also known as SOLLA)
- Vouchedfor
There are also many other people who will be able to point you in the right direction, but you should always check that every financial adviser you speak to is a member of the Financial Conduct Authority.
The Five Questions to Ask an Adviser
According to money-saving expert Martin Lewis, there are five key questions that you should ask yourself when choosing a UK-based financial adviser.
According to Martin Lewis, the key thing to remember is that you should never feel embarrassed when asking questions about what to do with your finances.
You work hard for the money you earn, and you should, therefore, never feel embarrassed to ask the questions you need to, in order to make sure you’re making the right choice by opting for them.
The first meeting with any financial adviser should be free.
This is your chance to ask them as many questions as possible in order to make sure that you are confident in your decision. Remember, there are no stupid questions [2].
1. Are they an independent adviser, or are they restricted?
The first question to ask yourself when choosing a financial adviser is whether the individual is independent or restricted.
An independent financial adviser will look across the entire financial market to find and offer you the best deals.
They will be entirely unbiased in doing and recommending offers and products to you.
However, restricted advisers are not able to offer you just any product, as they are only able to offer you products and services that are tied to certain providers.
This means that restricted financial advisers won’t be able to offer you as many products as independent advisers [2].
If you are speaking to a restricted financial adviser, then you should ask them exactly what their restrictions are.
2. How will I receive the advice?
The initial advice should almost always be face-to-face or at least over a video call.
From then onward, it might be that your communication works best via phone or email. You should ask them what you should expect and how they like to work.
3. Are they authorised?
All financial advisers should be members of the Financial Conduct Authority, also known as the FCA.
You should check that they are qualified and members of the FCA, and you can do so quickly by searching on the FCA’s website.
4. What qualifications do they have?
The next question you should ask your financial adviser is what qualifications they might have.
In order to be a member of the Financial Conduct Authority, they need to be a chartered financial adviser or have an alternative qualification of some sort. This should be at least Level 4.
Once they are qualified, they will need to have an annual Statement of Professional Standing, also known as an SPS [2].
This will prove that they are up to date with their qualifications. If they do not show you this when you first meet, you can always ask to see it.
5. How do they charge for their service?
Most financial advisers opt to either charge you an hourly fee or simply a flat or commission-based fee.
They will most likely explain this to you when you first meet, but if they do not do this, then you should ask them to explain.
You need to make sure that they are being clear, open and honest about how they charge, and you should get everything in writing so that they do not land you with a large bill that you aren’t expecting.
There are three main ways you have to pay for a financial adviser. These are known as a percentage fee, a fixed fee per service or an hourly fee [2].
Where to Get Advice for Equity Release?
If you want financial advice when it comes to equity release, then you should speak to a member of the team at Equity Release Warehouse.
Our team of professionals are on hand to search the financial and equity release market for you to find you the very best deals.
They will never put any pressure on you to release equity from your home. Instead, they will simply provide you with the necessary information you need in order to make an informed decision on your own terms.
There are many benefits related to equity release, but there might also be a number of other options for you, which should also be discussed with your adviser.
For more information on your finances and all things equity release, speak to a member of our friendly and qualified team by calling us on 0330 058 1579 or by visiting our website by searching for www.equityreleasewarehouse.com.
References
[1] https://www.citizensadvice.org.uk/debt-and-money/financial-advice/getting-financial-advice/
[2] https://www.moneysavingexpert.com/savings/best-financial-advisers/
