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Choosing the right financial adviser for you

Decisions about your financial future are among the most important you will ever make. A qualified financial adviser can use their years of experience to help you make well-informed choices, balancing your short-term priorities with your long-term goals.

Keep in mind that financial advisers don’t work for us. They work for you. Below you’ll find some information about some things you might want to consider when choosing a financial adviser, and the different types of advisers available.

Things to consider when you look for an adviser

For most people, their relationship with their financial adviser is a long-term one. That’s why it’s important to get the most from it. Here are a few things to consider:

  • Expertise: most people have specific financial planning needs. If you are interested in a particular area of investing, such as retirement or inheritance tax planning, you can choose an adviser with appropriate experience in that field.
  • Flexibility: is it more convenient to see them at your home or at the office? Check with your adviser to see how flexible they are.
  • Payment: different types of advisers are paid for their services in different ways. From 31 December 2012 the rules about paying for financial services are changing. Instead of being paid by commission – currently the most common payment method – advisers will be paid by fees. You can find out more about this here.
  • Comfort: it makes sense to deal with people you feel comfortable with. For example, if you prefer to deal with a female adviser, some sites allow you to filter your online search by gender.
  • Trust: be sure that you’re putting your trust in someone with the appropriate authorisation by checking with the FCA's Central Register.
  • Try before you buy: advisers will typically offer an initial meeting free of charge, giving you an opportunity to see if they are right for you.
  • Ask questions: Don’t be shy. It’s your financial future and you have to get it right. Ask plenty of questions during your first meeting and take your time to think it through before making up your mind.

Types of financial adviser

There are two main types of financial advisers: independent and restricted.

Financial advisers offering independent advice have to be able to advise on financial products from the whole market, whereas those offering restricted advice will advise on products from a pre-defined selection of products or providers.

All financial advisers, whether independent or restricted, must meet strict qualification and competence levels, and are regulated by the Financial Conduct Authority.

Independent advisers

An independent adviser may also be called an ‘independent financial adviser’ or ‘IFA’. This type of financial adviser provides independent advice and is able to consider and recommend all types of retail investment products that could meet your needs and objectives. They make these recommendations based on products from all firms across the market, and have to give unbiased and unrestricted advice.

Restricted advisers

A restricted adviser or firm can only recommend certain products or products from certain product providers.

Restricted advisers and firms cannot describe the advice they offer as 'independent' and must clearly explain the nature of the restriction. Some examples of restricted advice are where:

  • the adviser works with one product provider and only considers products offered by that company
  • the adviser considers products from several – but not all – product providers
  • the adviser can recommend one or some types of products, but not all retail investment products
  • the adviser has chosen to focus on a particular market, such as pensions, and considers products from all providers within that market.