6 Steps to choosing a Financial Adviser

Taking financial advice has changed over recent years, advisers are no longer paid by commission, the value of which may have been hidden in the small print somewhere. Now professional advisers will charge for their time and expertise which means that you have to actually spend your hard earned money to obtain advice in the same way that you have to pay a solicitor or accountant. Therefore, choosing the right adviser at the outset is even more important.

Financial Adviser

Step 1: Do you need a financial adviser?

Think about the type of help you need, if you need advice about managing debt or budgeting there may be free advice available from the Citizens Advice Bureau or the Money Advice Service and if you are over 50 and have questions about your pension the government’s Pension Wise service could be a good starting point.


However, if there is a significant event in your life like inheriting money, buying a home, having a child, getting divorced or if you are thinking about retirement or want to know how best to save for it then a financial adviser is best placed to enlighten you to all the options and find the right provider for you. Using an adviser can also ensure that you pay the lowest amount of tax as they know the most efficient way to set up plans and extract money from them for you.

Step 2: Independent or Restricted advice?

There are two types of adviser these days – independent or restricted. An independent adviser is able to use all the companies and investments that are available across the market place. Restricted advisers can only recommend from a limited number of providers and on certain types of products.


Most of the larger better known investment houses give restricted advice. These include St James’s Place, Hargreaves Lansdown and Tilney. Many advisers choose to be restricted because it means they can sell their own products and investment funds. However, impartial research has shown that these products can be expensive and poor value.

Step 3: What are the charges?

Most advisers will offer you an introductory meeting at their own expense, this gives you an opportunity to meet the adviser to see if you are comfortable with them and the adviser has the chance to meet you and check that they are able to provide help for your circumstances. At this meeting a good adviser will tell you about their charges. These should include fees for initial reports, set up costs of products and investments and any ongoing charges for the management of investments etc.


Make sure you ask about any exit fees. Some investment providers charge up to 6% if an investor exits within 5 years of taking out a plan. Good companies do not tie you in.

Step 4: Finding an adviser?

There are numerous online databases which list financial advisers, some of them list advisers for free others have had to be paid for, so don’t be fooled into thinking that appearing on the database is a comprehensive list or the best advisers. Recommendation is probably the best way to find a good adviser but if you need a specific type of advice like a mortgage or long term care make sure that adviser has the necessary qualifications and experience to deal with this.


The Financial Conduct Authority FCA have a register of all companies and individual advisers at fca.gov.uk which is a good place to look to make sure that the individual is a legitimate adviser.

Step 5: Choosing the right adviser?

Think about how you want to deal with an adviser. If you want to have face to face meetings having someone local can make this much easier. Even if you only have an initial meeting face to face this gives you an opportunity to know whether you feel comfortable with the person. Will you be able to ask them questions in the future, without feeling silly? Do they explain things in terms that you understand? As with so many industries some of the language used can be baffling so having someone that can break it down into lay man’s terminology or repeat it in a different way is important.


The adviser should ask you lots of questions about the whole of your finances, they should get a good picture of your taxation situation as well as your attitude to risk so that they are able to offer the best advice. If this doesn’t happen then they are probably not looking to build an ongoing relationship with you and are only interested in selling a product and moving on.

8 Questions to ask your would-be financial adviser

You should also find out what ongoing service is offered, will there be regular reviews of your investments. What happens if your circumstances change? A good adviser will want to keep in touch because not only do investment markets vary but regulation is altered so it is important that you know that your adviser will be in touch with you to advise you appropriately. Expect there to be a charge for this and the more hands on the ongoing service is the more you will pay for it. However, knowing that your adviser is on the ball to ensure that your investments and other plans offer you the best, any costs will pay for themselves in the long term.

1. Do you give independent or restricted financial advice?

2. Do you sell your own company’s products or investment funds and if so how can I be convinced that they are the most suitable for me?

3. What fees do I pay now and how do I pay them and how much do I pay on an ongoing basis?

4. What initial advice and ongoing service do you provide? How is this service delivered – face to face, by telephone or email?

5. How long have you been a financial adviser?

6. Do you specialise in a particular area?

7. Will I always see you or will other people in the company look after me as well?

8. How often will you review my portfolio?

The final point is to ‘listen to your gut’ if something doesn’t feel right then walk away, no one adviser suits everyone. Find the person that fits best, they talk in a language you understand, they answer your questions clearly. Whilst this doesn’t guarantee the perfect adviser it will go a long way to finding one that will provide you with a service that can really help protect you and make your money grow.

Savvy Financial Planning, Hinton Business Park, Tarrant Hinton, Blandford Forum, Dorset, DT11 8JF