UK financial advisors: how do I find the right one for me?

Trust is crucial when engaging a financial advisor. You are sharing confidential and private financial information with them. Financial advisors have the ability to steer your personal and business’ financial future, so it’s important that you find the right one. But, what should you look for when deciding to appoint a financial advisor?

Financial advisor – what does that mean?

Financial advisors work with individuals and businesses to provide advice and guidance on financial products such as savings, investments, pensions and insurance.

At the start of the relationship, most financial advisors prefer to meet you face-to-face, so they can get to know you and discuss your short, medium and long-term needs in greater detail.

Finding the right financial advisor

According to the Financial Conduct Authority (FCA) the organisation that regulates firms and individuals that operate as UK financial advisors, at the end of 2017 there were approximately 5,200 financial advisor firms, employing around 25,000 advisors.

With so many advisors to choose from, finding the right one for you or your business can be a tough choice. To make it easier, here are some things to consider when looking to engage with a financial advisor:

1. Decide on what type of advice you need
   Do you need assistance with your pension? Are you looking to purchase a property? Or, are you looking to save or invest? A financial advisor who is a specialist will have greater knowledge in a particular field but may not be able to advise you on unrelated areas. Before you start your search, you should think through all your needs and decide if a specialist or all-rounder is better for you.
   During your search, you may come across a couple of terms to describe financial advisor. These are ‘restricted’ and ‘independent’.

   As the name implies a financial advisor who is restricted is only able to give advice on certain types of financial products or are limited to the number of providers they work with.

   An independent financial advisor is not tied to a particular product or provider. Thus, they have access to all the available financial products from a wide choice of providers.

2. Ask for recommendations
   If you haven’t worked with a financial advisor before, or are looking to switch, it may be useful to ask family, friends and colleagues for recommendations. You should inquire how long they have been using the financial advisor, and what makes them good to work with. If you don’t have anyone you can ask. Check out the site unbiased.co.uk. The site contains details of thousands of UK FCA regulated financial advisors.

   Once you have shortlisted some financial advisors you are interested in working with, check their status on the FCA website. The FCA database will give you contact details of the advisor firm or individual including, postal address, telephone number, website and email address. More importantly, it will show if they are approved or authorised by the FCA.

   It’s important to point out that if you engage with a firm or individual that is not authorised by the FCA, you may not be covered by the Financial Ombudsman Service (FOS) or the Financial Services Compensation Scheme (FSCS) if you choose to make a complaint.

3. Understand their charges
   Your decision of which financial advisor to use shouldn’t be based on fees alone, but it’s important to understand what you are paying for.

   There is no one set way of levying fees. Some advisors choose to apply a fixed service fee, some charge by the hour or charge a monthly retainer fee, whilst others work off product commission i.e. they earn a percentage based on the cost of the product over the lifetime of the plan. It is worth enquiring if you can choose a combination of service fees for different products i.e. a monthly retainer for investments and hourly charges for pension advice.

   Ethical financial advisors are transparent about their fees and will let you know what it will cost you before providing any services.

When you engage with a financial advisor you are handing over sensitive personal details and confidential financial information, so it’s important that you choose someone who you feel you can trust, who is experienced in dealing with the products you need and most importantly who is regulated by the FCA.

We work with a number of financial advisors and you can speak to us on 0845 880 5678 or send us a message on website@wrightvigar.co.uk. We are not able to advise on specific financial service products, but can provide some details of independent financial advisors.