Choosing a financial adviser

Kim Jones
Kim Jones
Updated 26 August 2022  | 3 mins read

Key points

  • A financial adviser can provide guidance and recommendations on topics like investments, planning your pension or they can help you with ongoing long-term financial management
  • Ensure your adviser is regulated by the Financial Conduct Authority (FCA)
  • You need to pay for financial advice, but it can save you a lot of money in the long run

Making important financial decisions about your long or short-term savings, pension, investments or insurance products can be tricky.

This can especially be the case if you have little knowledge about specialist products, aren’t at all confident about which options would be best for you or have less than straightforward circumstances.

That’s where a professional financial adviser can step in.

They could show you how you can best manage and maximise your money, as well as helping you meet investment goals to secure a healthy financial future. They can help you with:

  • Pensions and retirement planning
  • Consolidating, transferring or drawing down on your pensions
  • Investments, stocks, shares and funds
  • Cash savings
  • Investment properties
  • General financial planning

What does a financial adviser do?

Once you’ve contacted a financial adviser, they’ll usually set up a meeting to discuss your needs, financial goals, future plans and your attitude to risk.

They’ll then come up with a financial plan which includes the types of investments and products that suit your requirements over the short and long-term.

When you have agreed the way forward, they’ll search for the best accounts and financial products for your needs.

And once you’ve decided on the products you want, they’ll organise the necessary transactions and paperwork.

Your financial adviser can then offer ongoing advice, if needed, and set up meetings with you at regular intervals (perhaps annually) to review your finances and make any necessary changes.

What do financial advisers charge?

Even though you have to pay for the services of a financial adviser, they could help save you a lot of money in the long run.

As they know the financial markets, they can help you avoid costly mistakes, show you products offering the best value for money, and help you invest more efficiently.

Normally, the initial meeting with a financial adviser is free.

From then on you could be charged in a number of different ways, depending on the adviser and the type of work they do for you.

For example, if they set up a particular financial product for you, you may be charged a fixed fee.

If an adviser is managing an investment portfolio for you on an ongoing basis, you may be charged a percentage of the value of the assets.

Or you may simply be charged an hourly rate.

Advisers may use more than one type of fee, depending on the work they do for you.

Check how they charge before you work with them to ensure you’re happy with the arrangement and costs.

How to find a financial adviser

Many people find their financial adviser by word of mouth and recommendations.

You can also search for advisers that are local to you and specialise in the type of financial help you’re looking for on websites such as Unbiased and VouchedFor.

Financial advisers must be professionally qualified and follow strict industry rules.

You can check if your adviser is regulated by the Financial Conduct Authority (FCA) and whether they’re authorised to provide certain services on the Financial Services Register.

If the name of their company doesn’t appear on the register, or appears with a warning, then it’s not registered, and you won’t have vital access to the Financial Ombudsman Service (FOS) or be protected by the Financial Services Compensation Scheme (FSCS) if things go wrong.

Types of financial advisers

There are two types of financial adviser - independent and restricted.

Independent financial adviser - Searches the whole financial market to recommend a wide range of products and services from multiple companies

Restricted adviser - Limited to certain products or providers, or both. For example, they may specialise in offering advice on a chosen area of expertise - such as pensions or shares.

Or they may be tied to a small range of providers, so will only be able to offer you products from particular companies or organisations

Alternatives to a financial adviser

If you’re looking for some initial guidance on things like pensions or savings, or just general financial help, there are a few places you can go.

Try MoneyHelper and Citizens Advice, you can even speak to an adviser for free help.

Also, if you’re aged 50 or over and have a personal or workplace pension, you can book yourself a free government Pension Wise appointment over the phone or somewhere local to you. It can help you understand the options available.

What’s the best option for me?

Many financial advisers can offer advice and product recommendations on a wide range of financial aspects and areas.

Others may be better placed to help you with certain one-off products you’re looking for.

For example, an independent mortgage broker, or adviser, is ideally placed to search the market for deals to suit your circumstances and budget if you’re looking to buy a property or remortgage.

And independent insurance brokers are experts in things like life insurance, critical illness cover and income protection insurance, if that’s what you’re looking for.

Whatever you’re looking for, always check that the company and financial adviser you choose to work with is regulated by the FCA in case anything goes wrong.