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Big rush for financial advice: tips to help you find the right adviser

Paloma Kubiak
Written By:
Paloma Kubiak

The second Monday of the New Year is known as ‘Advice Day’ and with a turbulent 2016, more people than ever are expected to seek financial help today. Here’s how to find the right adviser for your needs.

Today is the most popular day of the year for people to search for a financial adviser, according to unbiased.co.uk, a directory of advisers.

The unprecedented political events of 2016 and the ongoing record low interest rate environment, plus government policies expected later in 2017, including the new Lifetime ISA and a reduction in the Money Purchase Annual Allowance to £4,000, means today is expected to see the biggest single-day rush for financial advice.

Getting financial advice at any time of year isn’t cheap as the average UK hourly rate is around £150, according to Unbiased.co.uk.

But research by the site suggests UK savers who take advice save on average £98 more every month than those who don’t, and receive an additional income of £3,654 every year of their retirement, based on a £100,000 pension pot.

An independent financial adviser can offer both general and specialist advice on areas such as ISAs, inheritance, mortgages, insurance and pensions.

They’ll assess your situation and consider your wider personal financial objectives, needs and interests, before offering suggestions on how to optimise your finances. They will then suggest which financial products may be the best way to achieve your goals.

How to find an adviser

To find an adviser, YourMoney.com suggests using online services such as Unbiased.co.uk or vouchedfor.co.uk. These sites allow users to search for an adviser by specialism, location and cost. The latter also publishes client reviews.

How do I know if an adviser is right for me?

When you’ve identified a list of potential advisers, the next step is to pick the best one for your circumstances. The person you hire to look after your finances is one of the most important financial decisions you’ll ever make.

Here are four key questions to ask your candidates:

  • Are you an independent financial adviser?

This might seem obvious, but the legitimacy of an IFA should be your first consideration. For an IFA to qualify for the title, at the very least they need to hold a Financial Conduct Authority (FCA) -recognised financial planning diploma, and a valid Statement of Professional Standing (SPS).

If their qualification is not clearly displayed, ask for proof.

  • What are you best at?

Most financial advisers can advise on a number of topics, but whether you require general support across financial affairs, or seek expertise in one or two areas, it is important to identify an IFA’s core strengths.

  • What’s your philosophy in respect of…?

Every financial adviser will have their own views, beliefs, and personality. It’s important to understand an IFA’s philosophy – their strategy, selection process, risk appetite, and more – to see whether their characteristics match with your own.

  • How are you paid?

Since 31 December 2012, all advisers must charge an upfront fee they agree with you in advance. However, how they charge these fees varies significantly.

Most common is a percentage fee, proportional to the money managed. First, you will pay an initial percentage for becoming a client, then an ongoing percentage for each year the IFA manages your money. The percentage can vary significantly (it could be as low as 0.5 per cent, or as high as 5 per cent), so ask for clarification.  Other financial advisers bill by the hour, a payment structure associated with the legal sector.

See YourMoney.com’s How to prepare for your first meeting with a financial adviser to see what you need to think about beforehand and a list of documents to take with you.