Hi everyone, welcome back. Today we're going to be looking at how to choose a financial adviser.
When you decide that you need financial advice for whatever reason that may be,
there are generally a set of questions you should be asking either yourself or the financial adviser
so you can work out if they're the right fit for you and if they can help you in the
right way. So I'm going to be running through the list of questions you should be asking.
Make a list, make a checkbox and then you should be asking these of each firm you speak to before
you settle on choosing a financial adviser for yourself. Now this first question is the most
important one and it's 'are you independent or are you restricted?' So I myself am an
Independent Financial Adviser (IFA), so being Independent means that I have no limitations
on the products that I can choose or the policies, the providers, the investments - that's completely
up to me. I have free rein over the whole of the market and there are no limitations placed on me,
so that means that for every client I can choose the most appropriate investment
portfolio, provider, etc, etc. Now if you have a restricted adviser, it means they are limited
generally by a particular provider or a particular type of policy, so they
can only sell you products that are provided by that provider or that particular policy.
Now that can have its limitations because obviously they can't say 'this is the best
product on the market for you' they can only say 'this is the best product that we can offer you',
so it's very important that you make sure that you know what a restricted adviser is compared
to what an Independent Financial Adviser is and you make sure that they are going to be able to
meet your requirements. This second point is very important to a lot of people and it's about the
charges and the fees that you're going to have to pay for the advice that you're going to get.
Now a lot of advisers charge you nothing for their first meeting. It's generally a free meeting.
Certainly myself there's no time limit, there's no cost to it, and it's just a good idea to have
an initial meeting with an adviser so you can get to know how they operate and how they can help you
and also tell them exactly what your situation is and why you're looking for help at this time.
When you do see that adviser for the first time they should give you an idea of how
their charging structure works, whether it's percentage based, hourly based, fixed fee based,
etc, etc. So you want to be walking away from that meeting knowing what you will be paying
and when you would be paying it. They might not be able to give you an exact amount if it's a
percentage-based fee or if there are more than one element to your circumstances, then it might
vary slightly from what they disclose in their Client Agreement or in their Terms of Business,
but you should be able to walk away confident that you understand how their fee structure works.
If not make sure you ask plenty of questions. You need to feel confident that you're going to
be getting your money's worth out of them. Not only does this apply to fees for initial work
that's carried out - putting policies in place and things like that - but also for ongoing servicing.
Now you don't have to take on an adviser on an ongoing basis. You might just want a transaction
only service. But if you do want someone to be there for you on an ongoing basis; say that you
meet them once a year, etc, etc, and they're always going to be there for you to call up or
they'll get in contact with you if particular things happen, it's important to make sure that
you know what the ongoing costs are and how they will be paid to the advisers. And also if you
decide you want to cancel that at any point, what is the notice that you have to give the adviser?
Do you have to give them a year's notice, a week's notice, etc. So it's good to know what you'll be
tied into, if at all. Another good question to ask is 'how is the advice going to be provided?'
Now with this year, Coronavirus has obviously had an impact on how people are seeing clients
and things like that, but are you happy with a remote service? If so that's great.
A lot of advisers are offering Zoom meetings, remote conversations, phone calls and emails
only. Some advisers have managed to put social distancing guidelines in place in their offices
and so are still offering face-to-face meetings. So it's up to you really which would you prefer.
If it doesn't bother you then that's absolutely fine. I'm sure you can still meet your adviser via
video conferencing whenever you want to speak to them and some people prefer that because they
can do it from the comfort of their own home or on their lunch break or whatever is easiest for them.
But if you do want to have an adviser that you can go and see face-to-face in their own office
setting then you need to make sure that they are offering that at the moment because that
can be limited by Coronavirus. I'm not sure how long it will go on for but hopefully by the end
of this year or early next year you may start to see some more advisers on a face-to-face basis,
but don't quote me on that. You also want to make sure that your adviser is qualified
and has the right qualifications to be able to help you with what you want to achieve.
So they should somewhere either on their website or in their office they should have a certificate
that tells you what qualifications they have and who it's been provided by. They should have
a Diploma in Financial Planning or something equivalent offered by a particular company,
so either the CII, the CISI - there are various different companies that offer that qualification
and each one will be called something slightly different but it's called a Level 4 qualification
that you have to have to be providing advice to clients. Now you need to make sure your adviser
has at least that qualification, otherwise they shouldn't be meeting with you as an adviser.
Some advisers have specific qualifications that go above and beyond that, either in certain specific
areas, they may be Chartered for example, or they may be a Fellow of the CII - there are
various different ways you can achieve those different things - but it's important that if
something like that is important to you, you need to ask what extra qualifications they
have and what makes them qualified to help you particularly in that area that you're looking
for advice on. You also want to know how long the company's been trading, how big the company
is and how long that particular adviser has been qualified and has worked for that company.
Now those all kind of bundle up into one question but you need to know if they're a big company,
a small company, a one-man band and you need to be happy with that sort of size of company.
You also need to ask them how long they've been qualified. They might be newly qualified, they
might be a seasoned adviser, but either way they have to have at least a minimum qualification,
but some people might prefer to see someone that has a little bit more experience under their belt.
That's perfectly acceptable to ask an adviser when you see them in the first instance. If it's a
bigger company that you might be dealing with then it's very possible that you won't be speaking to
the same person, or a couple of people, every time you speak to the company, so you need to
be happy that that might be the case. Whereas if it's a one-man band or if it's a smaller company
it's very likely that you'll get to know your adviser personally and you will only speak to them
or there might be a small team of people that you will always be speaking to, so it could be a bit
more of a personal experience. There's no right or wrong answer, but you just have to be happy
that that company can meet your requirements. Last but not least, if you are taking ongoing servicing
with an adviser you need to know how often they're going to be reviewing your portfolio and inviting
you to attend review meetings. Now most advisers will invite you in at least once a year to speak
to them. You can of course call them up in between then if you want to have a chat with them or
there's something on your mind, or generally the adviser may call you in between those meetings
if there's something in particular they think you should know about. But it's important
that in their Terms of Business or their Client Agreement or whatever paperwork they've given you,
it should stipulate exactly what time frame there will be between portfolio reviews. Now
things can happen in the world such as elections, world disasters, Coronavirus, things like that,
that can mean your portfolio might have a bit of a sticky time and your adviser will be on hand if
you want to have a call with them and you want some reassurance. Please just pick up the phone
and speak to them - that's what they're there for. But generally you should be seeing your
adviser at least once a year. You don't have to go to that meeting if you don't want to - they'll
still be there for you - but if you don't really particularly think your portfolio needs reviewing
at that point, that's absolutely fine. But they should be inviting you in to speak with them once
a year. That's all guys. I hope that's a helpful checklist of things to go and speak to IFAs about.
It's always advisable to go and see more than one IFA before you choose who you want to use, just
so you can get a feel for how different companies work. But go out there and choose someone that's
right for you. Like the video, subscribe to the channel and I'll see you next time.