1

Are you independent?

There are broadly speaking 2 types of advisers. Independent or tied to one provider (i.e. restricted).

An independent adviser has a regulatory requirement to provide advice that is in your best interest and has access to the entire marketplace of financial solutions. 

A tied or restricted adviser usually works for one provider and as such can only advise you on what is best for you only based on what their company has to offer.

They do not have access to the entire market to advise you.

2

How do you earn your fees?

Since the end of 2012, commission has no longer been payable to financial advisers.

The financial advice world in the UK now operates on a fee charging basis agreed with you at the outset. There will be no fee payable to the adviser that you would not be informed of.

The fees that you pay may still be paid from the product, however this must be agreed with you in advance.

3

What will the total costs be?

Always ask the adviser for an indication of how much their fees are likely to be before you get into specific detail.

Some advisers work on a percentage basis and some on a monetary amount. Either way, it is important to understand this clearly as there is a significant range in the cost of advice ranging from initial advice fees of 1% up to 5%.

NB Remember to compare apples with apples! i.e. Check what you will get for your money. Sometimes it can be a better deal to pay a higher fee.

4

What are the adviser’s qualifications?

Every adviser in the UK must be qualified up to a minimum level and many have even a higher level of qualification. The minimum benchmark qualification is DipPFS or DipFA.

The highest level of qualification is either a Chartered Financial Planner or a Certified Financial Planner.

Anyone claiming to be an adviser that does not have any of these qualifications should be treated with caution as you may have no protection from the Financial Conduct Authority.

5

Adviser work experience?

How long has your adviser been providing financial advice to individuals like you? (i.e. not how long have they been working in financial services).

Several years’ experience is advisable but remember also to ask… When do they plan to retire?

6

How will the relationship work with the adviser?

It is important to understand what an adviser will do for you, how they will communicate with you, and how often.

Do they only provide advice digitally or face-to-face meetings or a combination of both?

Do I trust them with my financial goals in good times and in bad?

How will they manage your pensions and investments for you?

7

What is the advisor investment philosophy?

Most advice firms offer a range of risk assessed investment portfolios. Ranging from cautious to aggressive investors.

There are various alternative ways that your pensions and investments can be managed, so it important for you to know how the adviser firm will work.

Some advisers have their own in-house investment proposition and others outsource this to a third party. The type of proposition will have an impact on the overall cost of owning pensions and investments and to the overall investment performance.

8

Does the adviser only recommend regulated Investments?

This is very important.

Only regulated investments are covered by the regulatory system. Any unregulated investment is unlikely to provide you with any protection either from the Financial Conduct Authority, the Financial Ombudsman Service, or the Financial Services Compensation Scheme.

Most good advisers will not be prepared to give advice on unregulated investments due to the risks.

9

What type of people does the adviser work with?

Some advisers are generalists and will work with anyone.

Others specialise in a specific niche and become experts at helping people that fit this niche.

Are my advisers existing clients like me?

It is good to find an adviser that understands the issues that you wish to deal with and in many situations, they will understand the problems better than you, as they are dealing with many other clients with similar issues and objectives.

10

How does the adviser invest their own money?

I have left one of the most important questions until the end. If the financial adviser invests their own money in a completely different way to the advice that they give to you, it is important to understand why (i.e. ignoring differing appetite for investment risk).