Knowing what to do with your money isn’t always straightforward. With economic fluctuations, various external influences and a myriad of financial options, the importance of choosing the right financial adviser has never been more important.

The financial landscape is constantly changing, so the guidance of a skilled adviser can be the cornerstone of your efforts towards your financial ambitions. In this guide, we go through the essentials to consider when choosing an adviser.

Types of Financial Advisers

Financial advisers in the UK are broadly categorised into two types: independent financial advisers (IFAs) and restricted advisers. IFAs offer unbiased advice on the full range of financial products across the market, while restricted advisers can only recommend products from certain providers or within specific sectors.

Understanding the distinction between these types and knowing which to work with is fundamental in aligning your financial strategy with your goals. IFAs are usually best so you can benefit from advice on a wider range of approaches and products.

Your Financial Needs and Goals

Before searching for a financial adviser, it’s best to get some clarity on your financial objectives. Whether you’re planning for retirement, saving for your children’s future or managing wealth, your goals determine the type of adviser best suited to your needs.

With an idea of what specialities you’re looking for, you can streamline the selection process but also ensure that your adviser’s expertise matches your financial aspirations.

Credentials and Experience

The credibility of a financial adviser is underpinned by their credentials and experience. In the UK, financial advisers must be authorised by the Financial Conduct Authority (FCA). You can check if individuals and companies are on the Financial Services Register – just search by name or location.

Beyond the baseline requirements, look for advisers who have a proven track record in areas relevant to your financial goals. Experience, complemented by ongoing professional development, is a hallmark of a proficient adviser. Professional negligence could result in you losing money, so it’s best to be confident with your choice.

Fees and Compensation

Understanding how a financial adviser is compensated gives you insight into how and how much you’ll pay for their services. They’re usually compensated through fees paid by you, commissions from financial products they sell, or a combination of both.

Fee structures vary widely between providers, ranging from hourly rates to a percentage of assets under management. Transparency in fees and compensation is key to establishing a trust-based relationship with your financial adviser.

References and Reviews

You don’t need to go in blind with your search. The reputation of financial advisers can often be gauged through online reviews and testimonials.

Personal references and direct feedback from current or past clients provide invaluable insights into an adviser’s reliability, professionalism and performance. Don’t hesitate to ask for references and take the time to follow up on them.



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