A good financial planner can help transform your financial situation, taking your money management to the next level; however a poor one can really hold you back. This raises an important question: How do you choose a good financial planner?
Over the past few years the financial advice service came in for some criticism with many concerned that the commission culture was encouraging advisers to mis-sell products. To address these concerns, at the end of last year the government introduced new rules banning commission on sales of financial policies. It was an important step in raising standards across the service but still, choosing your planner is not entirely straightforward.
To help you negotiate your own decision, we’ve put together a list of the top ten things you should consider when picking a financial planner – it’s the advice you need to get good advice:
Narrow your search
There’s a dizzying number of financial advisers out there all vying for your business and evaluating any great number of them would be really impractical. Drawing up a shortlist of financial planners is a great way to cut down on the amount of work you have to do while you make a decision. Ideally your friends, family and colleagues will be able to recommend advisers they’re familiar with but even if this guidance isn’t available to you, see what’s available in your local area and draw up a list of candidates before moving forward.
Do some research
When you’ve got your list, start the process of finding the right adviser for you. The internet is an excellent resource for checking into potential financial advisers so use it. A simple search engine query can provide a wealth of information but there are also websites out there designed to specifically offer a place for financial adviser reviews.
Find out what they charge
Obviously this is going to have a big impact on whether or not you are going to pick a financial advisor but it is not the only thing you should take into consideration. Compare prices between different financial planners out there to ensure you are getting the best deal for your money but look out for offers which seem too good to be true – they’re probably just that.
Check their qualifications
Your first port of call should be the Financial Conduct Authority which has a register of financial advice providers (). Make sure the advisor you’re looking at is on the list and see what it says about them. If you need more information, go to the advisors themselves and see what qualifications they hold. The bare minimum is a basic Certificate in Financial Planning. However, what you really want them to have is a diploma or advanced diploma in Financial Planning – or even better, that they are chartered or certified in Financial Planning.
Ask about the types of clients they have
Different financial advisors may specialise in different types of clients. If you find a financial planner has clients who have very different circumstances to your own then they may not have a skill set which matches your needs. That’s not to say they aren’t excellent advisors, just not the best to handle your money and conditions.
Ask for testimonials
If you find someone who does match your needs, and has a client group full of people in a similar situation to yourself, don’t be afraid to ask the advisor for testimonials. A good advisor should be happy to blow their own trumpet and provide examples from happy clients. If your advisor is evasive on the issue then take it as a warning sign.
Find out what services they provide
This is an area which should closely align to your own requirements. Make sure the advisor can offer you advice in the areas that you want to pursue. For example if you are interested in looking for bespoke wealth management services try to establish if the advisor has a track record in this area. You should be able to get some basic advice without signing up with them first.
Find out what level of service they provide
Again, it is important that the financial planner you choose can handle the specifics of your financial needs. This doesn’t just mean in the areas that you are interested in but also in terms of the amount of money that you want to have managed. Different advisors will specialise in different levels of client, from those with a fairly modest outlook to high-fliers with multi-million pound portfolios. Whichever part of the scale you’re in, you’ll get the best service at someone who is targeting your sort of financial situation.
Read the paperwork. Closely!
When you have found a financial adviser you like and go to sign on with them it goes without saying you should check over everything you are signing. The old adage that you should check the small print is about as clichéd as it gets but the fact is there is that is some of the soundest advice you could get when you are entering into such an important relationship. So before you sign on the dotted line make sure you know where you stand.
Keep an eye on their conduct
Finally, when you’ve signed on with a financial advisor remember it’s not the end of the journey; in fact, in many ways it’s just the start. Just because the advisor you have chosen ticks all the boxes it doesn’t mean they deserve your blind faith. Maintain a close eye on your financial advisor and if you see anything you’re unsure about raise it with them. Chances are if you’ve done the work before hand you’ll have found someone you can depend on but there is always the chance you have been mistaken. If this is the case, and you think your advisor has broken the rules in their dealings with you then don’t be afraid to complain, and in serious cases get in touch with the financial ombudsman who can help you deal with unscrupulous agents.
Have you ever dealt with a financial adviser? What’s your advice?