Making financial decisions can be daunting.
Even though I’ve worked in the finance sector for most of my life, I still worry about whether I’m making good choices, particularly with so much economic uncertainty. However, because I’ve worked in the sector, I do take advice when I’ve got a big decision to make. Whether that’s my pension needs; managing my debts; or how best to meet my savings goals.
The financial decisions that you take in your early working life can ultimately define your future prospects and security. Professional financial advisers can take a lot of pressure out of decision making, save you valuable time and, hopefully, help you get better outcomes with your money.
Many people are understandably cautious about seeking professional financial advice. But, knowing exactly what a professional adviser is and should alleviate some of your worries. Here’s some information on financial advisers and finding the right one for you.
What is a financial adviser?
A financial adviser is a qualified professional who helps advise individuals on their finances and investment options. This can cover a range of things from buying shares, helping you to reach your savings goals quicker, planning for later life or deciding on long-term investment options such as pensions.
They can recommend financial products that are suitable and affordable for you, to help you achieve your financial aspirations.
All financial advisers are regulated by the Financial Conduct Authority (FCA), and they need to have professional qualifications which ensure they meet the standards set out by the FCA. They must also have a Statement of Professional Standing (SPS).
A financial adviser with an SPS means they have signed up to a code of ethics and have completed at least 35 hours of professional training each year on top of their professional qualifications. That means they’re committed to keeping their knowledge up to date. Don’t be afraid to ask an adviser about their qualifications and SPS. If a financial adviser is not registered with the FCA, don’t use them.
Questions to consider when talking to a financial adviser:
- Are you approved by the FCA?
- What experience and qualifications do you have?
- What type of advice do you offer?
- What services do you provide?
- What are the cost and fees?
What are the benefits of getting financial advice?
Financial advisers help you find products that suit your particular needs and circumstances, at whatever stage you are in your life; a student, just starting your career, starting your family or for later life planning.
Depending on the type of adviser you use you may have access to a broader range of choices than you would be able to find on your own. You will also have more protection if things go wrong. For example, you are protected if a financial adviser provided incorrect or conflicting advice and you lose money as a result.
What types of financial advisers are there and what services do they offer?
Independent advisers and restricted advisers. Independent advisers can look at products from providers across the whole market.
Restricted advisers can only recommend specific products from a limited list of providers. An adviser will explain what advice they can give you.
If you’re only looking for advice on mortgages, you should talk to a mortgage adviser.
So how do you know if you need financial advice?
There are lots of places you can go for information on savings and investment products that might be right for you.
These sources are great for general information, but they can’t give you specific advice on products or services you should consider. So if you are making a big decision, your circumstances are complicated, or you have a lot of money to invest, that’s where an adviser can help.
Finding a financial adviser
It may take a bit of research to find the right financial adviser for you. You might want to ask family and friends for a recommendation and check out customer reviews of their services. But, most importantly check the FCA website to ensure your adviser is registered!
Other sources of information
- Further information about financial products, and how to seek financial advice, can be found on the Money Advice Service, which is a free, independent service set up by the government.
- If you need help managing debt, you can talk to the national debt line – a free government advice service.
About the author
Alison Pask, Managing Director of Financial Capability and Community Outreach at The London Institute of Banking & Finance, a registered charity and leading provider of financial education in schools, at under-graduate and post-graduate level. It’s also an awarding body for professional qualifications in the sector.