Important things to know about UK regulated financial advisors

Within the UK, over the past 30 years, there’s been a seemingly endless string of mis-selling scandals involving pensions, investments and commission driven products - most notably for payment protection insurance (PPI). These repeated instances of financial misconduct have left many people within the UK sceptical about the wisdom of approaching someone for financial advice, and nervous of knowing who to trust. 

Financial Advisors in the UK must now be authorised and regulated by the FCA before they can offer financial services in the UK. The move towards these tougher standards were first introduced in 2013 under the Retail Distribution Review (RDR), which forced regulation upon all advisers, by making it a legal requirement to hold high levels of qualifications whilst also banning commission-driven sales. 

Even so, as in all industries, quality varies greatly and when looking to find a financial adviser, you can greatly improve your experience and your chances of receiving excellent advice services by ensuring you’re using someone accredited by the financial ombudsman service.

Nowadays, individuals have much greater control of their financial affairs and can look online for a large amount of information on financial products before paying for financial advice. Pension freedoms, the rise of cheap tracker funds and technology platforms make it much easier for those with a degree of savvy to run their own money, and cut out the middleman. But not everyone feels capable of dealing with their own personal finances without a degree of help. So what is the best way to get that financial advice?

With an estimated 27,000 financial advisers in the UK, it can be hard to pick the right person, let alone the right investment product. If you’re looking for a financial adviser but don’t know where to start, hopefully, this article will prove useful to you. After all, picking the right person to handle your financial affairs is hugely important,  and finding the adviser best suited to your needs in a crowded marketplace can seem complicated at first.

There are two main types of adviser: independent financial advisers (IFAs) and "restricted" advisers. It is the first type that has the greatest freedom to help you with no strings attached. IFAs provide impartial, unrestricted advice that considers every option on the market. They also can’t make agreements with investment groups and other financial firms to push their services – so they should be free from bias and able to work in their customers’ best interests.

However, not every IFA will be right for you. Here is a step-by-step guide to finding yours.

The first thing to do is identify a number of potential candidates. Personal recommendations from family and friends are one of the best ways to generate some ideas. Check the actual quality of the service provided by the firms it lists. In the absence of a personal recommendation, you may prefer an adviser who has additional qualifications for further reassurance that he or she is able to meet your needs.

The Chartered Insurance Institute has qualifications including Certificate in Financial Planning (CertPFS), Diploma in Financial Planning (DipPFS), Advanced Diploma in Financial Planning (APFS) and Fellowship (FPFS).

There is also then “chartered” status, which requires a certain level of qualification plus five years' experience, and is the CII’s highest qualification. You can search on the CII’s member search tool to view an adviser’s qualification level.

All financial advisers need to hold a minimum Level 4 qualification, such as the diploma in regulated financial planning. Many have demonstrated a greater commitment to their technical expertise and planning skills by becoming a chartered financial planner or certified financial planner, and you should always make sure of your chosen person’s qualifications before appointing them. 

Check that you understand what type of financial advice your financial adviser is offering, and what it means for you. Independent financial advisers (IFAs) are required to consider all products, across all relevant providers, for you when giving you advice on your savings and investments and on their recommended products. Restricted financial advisers have restrictions in either the products or the providers they recommend and some might only recommend on their own company’s products.

Sometimes restrictions can enable financial advisers to offer improved service or lower fees. But it's important to always ask the adviser about any restrictions on the advice they can offer and how this can affect you. While all financial advisers and mortgage advisers must be qualified, having relevant and wide-ranging experience may help them give the right advice to you.

The next stage is to sound out two or three potential advisers. Speak to them on the phone to find out if they are someone you think you can work with, and be sure to discuss their qualifications, background and fees at this initial stage.

Once you’ve settled on a promising candidate, you need to set up an initial meeting. There should be no cost for the first meeting with a prospective financial advisor, and you should not feel pressured into making any financial decisions at that initial meeting. If the adviser isn’t giving you time to think, that is a major red flag and time for you to pack your bags and walk away. 

Key questions to ask a Financial Adviser: -

  • Is the adviser independent, or restricted, in the policies and products they can recommend to you?

  • Can they give you a summary of the services they provide and their requisite experience in those fields?

  • Will the same adviser be handling you for the foreseeable future, and what will happen if they leave?

  • Can they provide testimonials and proof of satisfactory service levels from their existing clients?

  • Who are they regulated by, and where are the proofs of their qualifications? 

  • Do they charge fees, earn commission or is it a mix of both, and what fees will you specifically incur?

  • How regularly will you be able to speak to them, and what do they suggest as optimum meeting periods?

  • Do they offer personalised advice, or use generic financial planning and forecasting models?

  • How regularly will they review your portfolio, and how will they update you on any changes or on their suggestions?

Start planning your future. Speak to us today.

Contact Us

Seventy Financial Planning
The Apple Store, Haggs Farm,
Haggs Road, Follifoot, Harrogate,

01423 611004

[email protected]

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