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Choosing a financial adviser

Choosing a financial adviser might seem daunting, but if you need help with a financial decision it’s well worth persevering. A good adviser can save you money and a lot of worry.

The key to finding the right financial adviser is knowing what type of advice you need.

For example, are you:

  • looking for help with investing into your pension or a Stocks and Shares ISA?
  • coming up to retirement or navigating your way through it?
  • looking for a mortgage or perhaps life insurance?
  • simply looking for help with keeping your finances on track and meeting your long-term goals?

There are lots of reasons why people need advice from a financial adviser. But there are also lots of different types of adviser, so it’s important to know who to go to and when.

How to find a financial adviser

Personal recommendation from friends or family is one way to find a financial adviser. But even if you get on well with an adviser it’s hard to judge in the short term how good a job they’ve done

Some unions or affinity groups and workplace pension schemes have selected advisers to recommend to their membership. So if you’re a member of one of these groups, check with them first.

There are services that can help you search for a financial adviser on the basis of where you are and what you’re looking for help with. They include:

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Types of adviser

Financial advisers aren’t always called ‘financial advisers’. Instead, they’re sometimes named by their specialism, such as ‘mortgage adviser’, ‘investment adviser’, ‘pension adviser’ or ‘financial planner’.

Sometimes, they are known as ‘brokers’ – often when dealing with products such as:

  • mortgages
  • home and car insurance, or
  • investments including shares.

Whatever they might be called, what all financial advisers in the UK do have in common is that they’re regulated by the Financial Conduct Authority (FCA). This means there are rules they must follow when dealing with you.

There are minimum qualifications that all regulated financial advisers need to have achieved. Most will have achieved benchmarks above that, such as the Chartered Financial Planner or the Certified Financial Planner qualifications.

They might also have specific qualifications covering the areas they specialise in, such as long-term care, equity release and pension transfers.

Most advisers will offer you a free initial meeting. This gives you the chance to get a sense of whether you're comfortable with them and how they work. Any properly qualified adviser will show you their certificates if you ask them to.

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Advisers who deal with investments, pensions (including pension transfers), retirement income products and general financial planning

Advisers recommending these types of products must carry higher levels of qualifications and can’t receive commission from the products they sell.

Instead, they charge a fee for the advice they give but there might be different options for how you pay the fee.

Advisers who provide advice on the products listed above might also provide advice on protection insurance (such as life insurance) and sometimes mortgages.

Many offer holistic financial planning, where they’ll advise you on all aspects of your financial needs.

Advisers in this category are classified as either independent or restricted.

Restricted advisers might either be restricted in the type of products they offer, the number of providers they choose from, or both.

Independent financial advisers (IFAs) can recommend all types of retail investment products and pension products from firms across the market without restriction.

You might want to consider choosing an adviser who can deal with a wide range of product providers for the product they are recommending – and not just one or two. That way, you know you’ll be getting the widest choice.

But the quality and suitability of the advice shouldn’t be affected by whether you decide on an adviser who can advise on all the market or one who’s restricted to one or more providers.

Make sure you understand the type of service they offer before you decide whether to get advice from them. That includes the cost of the advice and the method of charging.

Advisers who deal with mortgages and equity release

Mortgage advisers must have specific mortgage qualifications.

Advisers recommending equity release products must also have a specialist qualification in equity release. These advisers are still allowed to be paid by commission on any mortgage or equity release product they sell.

Some mortgage advisers also charge a fee for their services.

Many mortgage advisers can also advise on protection insurance, such as life insurance.

Mortgage advisers might offer a whole of market service. Although this won’t necessarily mean they can recommend any mortgage from every lender, as some lenders only offer mortgages direct to the public.

Some mortgage advisers offer ‘restricted’ advice and might be tied to just one lender or might only be able to choose from a small number.

An ‘independent’ mortgage adviser will be able to offer a broader range of options from across the whole of the market.

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Advisers who deal with general insurance products (such as home, car and travel insurance) and protection insurance (such as income protection and critical illness)

These advisers are often also known as insurance brokers.

Like mortgage advisers, they’re paid by commission on any insurance product they sell. They don’t usually charge an extra fee.

Insurance brokers will also help you deal with any claims you might make and will shop around for you every year to make sure you’re getting the best deal.

If your circumstances are out of the ordinary – for example, if you live in an area at risk of flooding or you’ve health issues and need travel insurance – an insurance broker can be especially useful.

They know the insurers who deal with the type of insurance you need and will be able to find you the best deal.

But some insurance brokers deal with a wider range of providers than others. So always check the level of service they offer and how many providers they work with.

As with other types of financial advice, brokers who deal with a wide range of insurance providers will give you the widest choice.

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Looking for us? Now, we’re MoneyHelper

MoneyHelper is the new, easy way to get clear, free,
impartial help for all your money and pension choices.
Whatever your circumstances or plans, move forward with MoneyHelper.

Continue to website
Looking for us? Now, we’re MoneyHelper

MoneyHelper is the new, easy way to get clear, free,
impartial help for all your money and pension choices.
Whatever your circumstances or plans, move forward with MoneyHelper.

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