A good financial or choosing the right financial advisor will help you wade through the overwhelming choice of investment products on the market and help you to choose those best suited to your particular circumstances.
But how do you settle on the right person to guide you? And how do you know that they will be committed to you and focused on meeting your needs? Here are some tips to bear in mind when choosing someone to entrust with your financial affairs.
Choose a financial advisor who is independent
Banks and building societies usually have “tied” financial advisors – that is, those who can only recommend products from the companies that they represent. By choosing an Independent Financial Advisor (IFA), you will not be restricted to the offerings of one particular organization; an IFA is able to recommend the products that are most suitable for you, regardless of which company they come from.
Choose a financial advisor who offers a full service
In order to give you the best possible service, an advisor needs to examine the whole of your financial affairs and take the time to understand your requirements and aspirations.
They need to have an accurate idea of your current financial situation and what you hope to achieve by the products that you invest in. They also need to know your short-term needs and your long-term aspirations.
It is important to recognize that financial advice is not a one-off event, but an ongoing process. Choose an advisor who will regularly review your financial affairs to see if your needs are being met and propose any changes that may be necessary to achieve your goals.
Choose a financial advisor who has relevant experience
You are likely to get the best advice from someone who is experienced in dealing with people who are in a similar situation to you. Make sure that you choose someone who is used to giving advice to people from your background and outlook.
Choose a financial advisor that other people are willing to recommend
Personal recommendation is the best advert for a good financial advisor. Ask for testimonials from satisfied clients who can vouch for the results they have achieved over a period of time, say five to ten years, from following the advice they have been given.
Choose a financial advisor whose costs are transparent
Currently, UK financial advisors can be paid in two ways: by taking a commission on the products that they sell or by a direct charge for their services.
Although it might appear at first glance that the first method is preferable, do not make the mistake of thinking that you are not paying for your advice: the commission is included in the ongoing administrative costs that are deducted from your fund or account.