Editorial Team
AUTHOR Editorial Team| CREATED 28 Oct 2015

Choosing the right financial adviser for you

Financial advisers usually work for you, not the provider of the products or investments they may recommend. So treat finding an adviser in the same way you would if you were looking to hire a lawyer, a plumber or a builder. Ask around for recommendations, check them out online and be prepared to interrogate them on their experience and credentials!

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:

  • Trust: be sure that you’re putting your trust in an authorised financial adviser by checking with the FCA's Central Register.
  • 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.
  • Expertise: most people have specific financial planning needs. If you have certain set goals, such as saving for your child’s education or starting a pension, 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 the adviser to see how flexible they are.
  • Payment: Advisers are paid for their services in different ways depending on the type of products they are recommending.
    - For advice about investments, pensions and retirement income products they must agree fees with you and can no longer be paid by commission.
    - For advice on mortgages, general insurance and term life insurance, advisers are paid commission from the products you take out.
  • 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.

Editorial Team

Old Mutual Wealth Expert in Finance, Protection, Investments, Pensions