How to find the right financial adviser

Some people feel confident making financial decisions without taking professional advice – particularly if they’re choosing relatively straightforward services such as deposit accounts, ISAs or insurance. But some products, such as investments or pensions, can entail lengthy commitments and often have complex features.

If you do decide that you could benefit from professional advice – perhaps after checking out the government guidance which is freely available – you can use a directory to help you locate an adviser near where you live. Some of these directories also allow you to find advisers that specialise in a certain type of advice. Remember that financial advisers usually charge a fee for their services. To find out more about fees, read Advisers: what they charge, and how you pay.

 

Government directories

The Money Advice Service provides its own directory of financial advisers.

Professional body directories

Every adviser must be a member of a professional body. Most are members of either the Institute of Financial Planning or the Personal Finance Society. Each has its own adviser directory. 

 > Institute of Financial Planning

>  Personal Finance Society

 

Other directories

Other directories which can help you find a financial adviser include some that specialise in a particular type of adviser: 

> Society of Later Life Advisers

> Unbiased

> Vouchedfor

> Cherryfind 

 

Recommendations from friends and family

There are pros and cons in taking a recommendation from friends or family who have their own financial adviser. Like you, they are also unlikely to know whether a financial adviser is the most competent person to advise them on their needs. If it doesn’t work out well, you may end up falling out.

On the other hand, if your family member or friend has been dealing with a particular adviser for some time, they will at least have some view on whether that adviser is good or not.

Staying alert to scammers

You need to be aware that there are people who present themselves as financial advisers, but who are not authorised to provide financial advice, and aren’t regulated by the Financial Services Authority. Some of these people are fraudsters who will try to convince you to ‘liberate’ your pension, while others will try to convince you that you can earn a far better return by investing your money in a particular investment opportunity.

A common cause of financial loss is when people invest in highly speculative investments, which in some cases are also fraudulent. These investments may include foreign hotels and hotel rooms, foreign land and property, storage units, car parks, wind farms and breweries amongst many others. They often come with the promise of attractive returns, or rates of interest, that you would be unable to achieve elsewhere. They are also attractive to the person who convinces you to invest in them, as they usually receive large amounts of commission if you invest your money.

Unless you are a speculative investor, prepared to accept that you will lose all your money if a particular venture fails, avoid unregulated investments. Even if you are a seasoned investor, make sure you do your own homework on such schemes.

The Financial Conduct Authority provides a lot of information about how to avoid being scammed via its Scam Smart initiative.

The Financial Conduct Authority (FCA) register

All regulated financial advisers and financial advice firms must be registered with the FCA and are given their own reference number. Before dealing with any financial adviser, check that their name and that of their firm appears on the FCA register.

Remember, whatever type of investments you choose, you need to be aware that their value can go down as well as up, and you may not get back what you invested.

Qualifications

All regulated financial advisers must be qualified to a minimum standard; the Qualifications and Credits Framework (QCF) Level 4. Some advisers go further and are qualified to QCF Level 6 – equivalent to an ordinary degree.

The top qualification is Level 8, equivalent to a doctorate. This is only available from universities which offer a relevant PhD.

Financial adviser designations, related to qualification level, are awarded by professional bodies, most commonly the Institute of Financial Planning (IFP) or the Personal Finance Society (PFS), although some universities also offer degrees in financial planning.

Common qualifications and levels

Professional body

Designation

Qualification Level

The Personal Finance Society

Diploma in Financial Planning (DipPFS)

4

The Personal Finance Society

Diploma in Regulated Financial Planning (DipPFS)

4

The Personal Finance Society

Advanced Diploma in Financial Planning (APFS)

6

The Personal Finance Society

Fellowship of the Personal Finance Society (FPFS)

6+

The Personal Finance Society Chartered Status

Available to advisers with APFS or FPFS designations who have at least 5 years’ industry experience

6 or 6+

The Institute of Financial Planning

Certified Financial Planner (CFP)

6

The Institute of Financial Planning

Fellowship (FIFP)

6+

 

You might also be interested in...

> Guidance, advice...what's the difference?

> Advisers: what they charge, and how you pay


 

AR01983 04/2017

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