The cornerstone of good financial advice is in finding the right adviser to work with. David Pugh, our Chief Commercial Officer, explores the steps which can be useful in the quest to choose a financial adviser.
Seeking out a good financial adviser might feel like something of a challenge. It’s no surprise that there are lots of options to consider, especially if you face added complexities such as living overseas. Thankfully the last few years have seen increased regulation of financial advisers, most recently with the Retail Distribution Review in 2013. This eliminated commission across the sector and meant that advisers had to embrace stringent qualifications. The result was a significant drop in the number of advisers in the UK – from 40,000 to 26,000.
But how do you find the right firm for you? As a first port of call you might start by asking friends, family or colleagues, or using a directory, your chosen news source or another third party. Yet these routes might be loaded with bias or personal experiences and ultimately leave you more confused.
It can be useful to start with determining whether the adviser is truly independent or restricted. Advisers who are independent can offer you a range of financial products from across the market. Those who are restricted are limited in what they can provide, although their fees may be cheaper because they will only offer a centrally approved product.
A question of fees
Advisers must provide you with clear information about what they will charge you. A typical approach, and the most common, is a percentage charge based on your investment portfolio, but other options include an hourly rate. Some firms are more expensive than others, so it’s important to consider what you feel is fair and reasonable for the service you are being offered.
Do consider the accreditations of the firm, and whether there is a programme for regular, ongoing training for advisers. One of the most useful checks is whether the firm itself is recognised by the CII as a Chartered Financial Planner. This is a widely accepted ‘gold standard’ qualification for financial advisers in the UK.
Ultimately it can be helpful to consider how firms rank against their peers. And it’s not just a case of who is the largest – being big certainly doesn’t equate to good client relationships and quality of advice.
One of the most useful tools available is the FT Advisor Top 100, one of the most sophisticated and transparent lists which can be used when choosing a financial advisor.
FT Advisor ranks financial advisors based on a range of criteria, reviewing which firms attract the most business, the number of advisers employed and their professional qualifications, the age of the business, the ability to retain clients along with an estimated performance based on asset growth. Ultimately the rankings aim to highlight firms that do the best by their clients.
And that is really what you need to consider when seeking out a financial adviser. Dig deep, ask questions and choose the firm which you feel offers the best option for you, your family and your unique personal circumstances.
Contact us to speak to one of our Financial Planners about your personal circumstances and to see how we can help you.
David Pugh, Chief Commercial Officer