With each new year comes at least one resolution to do something different, to kick-start a new system, or to put into place a new, good habit. While many of us may fail to keep up with our fitness resolutions much past the end of January, when it comes to re-evaluating our finances or making big changes to improve them, we don’t hesitate to get going to make our life easier. If finding a new independent financial advisor to put your finances, mortgage, or pension in order is one of your new year’s resolutions this year, our team at Plutus Wealth has put together our top tips to help you find someone qualified, experienced, and suitable for your needs. To find out more about us and what makes us qualified to offer such advice, simply visit our site on www.plutuswealth.com.
What exactly is an independent financial advisor?
An independent financial advisor, or IFA, is one who can offer advice on products across the whole of the market without bias. In other words, they are not tied into a particular product or organisation and can search the market to find the most suitable products to meet their clients’ needs.
Seek recommendations
We all have a network of friends, colleagues, or business partners. This is an excellent place to start as they will have your best interests in mind and be able to offer some potential names of organisations or individuals you could approach. Ask around and compile a list of names that you can take away and research further.
Check that they are authorised
Armed with your list of recommendations, your next step should be to check that they are registered with the FCA’s Financial Services Register which lists all organisations and individuals who are authorised to provide independent financial advice. To be registered and to act as independent financial advisors, they must comply with the strict regulations set by the Financial Conduct Authority (FCA). These offer protection against unregulated organisations and provide an avenue for recourse through the Financial Ombudsman Service and the Financial Services Compensation Scheme should things go wrong.
Enquire about qualifications
All independent financial advisors must hold a minimum qualification in order to be registered with the FCA. This is known as a Level 4 qualification and includes a Diploma or Advanced Diploma in Financial Planning while university-level degrees exceed those minimum requirements. You could also ask whether they have achieved chartered status through the Chartered Insurance Institute, although that is not a requirement for FSA registration.
Ask how they will provide their advice
An independent financial advisor will work by first finding out more about you, your financial circumstances, and what you are aiming to achieve. They will then review the market to find suitable products to help you do that. Typically, they will prepare a Suitability Report, outlining the information that you have provided, the products that they recommend and the reasons why, together with an outline of how these products have been performing to date to give you a snapshot of how it could work for you. This advice and report can either be sent to you electronically or can be discussed with you in detail in a face-to-face meeting – offering you greater opportunities to ask questions and delve into things in more depth. Some also offer telephone consultation options. It is worth checking how they operate and whether there are any differences in their fees for each option.
Find out how they charge
Independent financial advisors will charge their fees in one of three ways:
- As a percentage. This is the most common way and will be calculated as a percentage of your money that they invest or manage. That percentage can vary widely, so be sure to check what it is and how it is structured so that you can better compare with other providers you are considering.
- As a fixed fee. This applies to those clients who are seeking advice on a one-off basis – for example, consolidation of a pension or provision of mortgage advice.
- As an hourly rate. If this is your preferred option, ask for a full breakdown in fees and tasks and make sure you know what that hourly rate is as it can vary between organisations and individuals depending on their qualifications and experience.
Why not start with us? For wholly independent financial advice from a well-qualified team and with flexible pricing mechanisms, get in touch with us at Plutus Wealth. We can help you keep your resolution and get you finances in the best order possible. You can call us on 020 7871 5200 or drop us a line at info@plutuswealth.com whenever you are ready.
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