Questions you should ask a financial adviser

August 2015

Questions you should ask a financial adviser
What questions should I ask an adviser? by MONEYSAVINGSEXPERT

Don’t feel embarrassed. You’re potentially going to be transacting a lot of money via this person, so you have every right to ask questions and make sure you’re confident in your decision.

Usually your first meeting with a financial adviser is free, so you’re under no pressure to use them if you’re not impressed, or you simply don’t ‘click’. If you go in armed with the below list of questions (and any others you have of your own) you’ll be best placed to make a decision.

  • Q. Are you independent or restricted?
  • A. This is probably the most important question you can ask and it’s best to make it your first so you know where you stand. An independent financial adviser will be able to search the whole of the market to get the best product for you, and must be entirely unbiased to call themselves independent. Read more on the difference.
  • Since 31 December 2012, advisers who are not able to search the whole market, or are tied to certain providers, must class themselves as ‘restricted advisers’.
  • If you find a restricted adviser, check what their restriction is. Some are called restricted because they have, for example, chosen to specialise in certain areas such as pensions and won’t offer advise on anything else.
  • However, other restricted advisers are tied to certain providers and will only be able to offer you products from those providers, or none at all if there are no products they can advise on that match what you want. Always check if the adviser you are consulting meets your needs. If in doubt, always, always look for an independent adviser.
  • Q. How will I receive the advice?
  • A. You should ask whether the advice will be given to you face-to-face, on the phone, via email or in a report. If you have a preference, ask if there are different prices for each.
  • The adviser should send you an outline of their recommendations, which is usually called a ‘suitability report’. Read and check this carefully to ensure it reflects the discussion you had with the adviser and that you understand why they recommended a particular product.
  • Q. Are you authorised?
  • A. The FCA monitors firms to check they are qualified and above board. Before you meet any IFA, do a quick search on the FCA’s website to check they’re fully authorised.
  • Q. What qualifications do you have?
  • A. The FCA requires all IFAs to pass what they call ‘Level 4 qualifications’ – so you should be looking for a diploma-level certificate, such as the Diploma in Financial Planning (DipFP) (formerly the Advanced Financial Planning Certificate), or even better, the Advanced Diploma in Financial Planning

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