At some point in your life, you’ll probably find you need the services of a financial adviser. It could be triggered by a life event – like buying a home, getting divorced, selling your business, or receiving an inheritance.

In many cases, it might lead to a more holistic analysis of your finances, and the creation of a long-term plan that will help you achieve your life goals.

For that reason, choosing an adviser is a little like choosing a life partner – and in a way, that’s exactly what they are. You need to find someone you trust, with the right qualifications, and who has a good track record of working with people like you. Importantly, you also want someone you get on with and feel you can talk to openly and honestly as your life journey progresses.

Working with the right adviser can make the difference between a carefree financial future and a stressful one. So, don’t be afraid to ask tough questions – a good adviser will welcome them.

An independent adviser can search the ‘whole of the market’, meaning they're able to recommend products and services from all available providers

Knowing the questions to ask when choosing a financial adviser is essential to finding the right fit. To help you, here are our eight most important questions that should be on your list:

Question 1: Are you an Independent Financial Adviser (IFA)?

An Independent Financial Adviser will give you unbiased and unrestricted advice, based on their analysis of your finances. They can access the ‘whole of the market’, meaning they are able to recommend products and services from all available providers. According to data from the Financial Conduct Authority (FCA), IFAs make up around half of all financial advisers in the UK.

Unlike IFAs, ‘Restricted’ advisers only have access to a limited number of products from a limited range of providers. In some cases, they may only offer products from one provider.

Restricted advice can be a problem if you have specific requirements, as the limited range of products may not be sufficient for your needs. It’s important to establish whether the adviser is Independent or Restricted from the outset, and precisely how those limitations could impact you.

Question 2: What services do you offer?

Advisers differ in their expertise and specialisms, so it’s important to ensure the person you’re talking to has the right kind of experience, and licences, to manage your particular requirements.

For instance, someone who is licensed to advise on mortgage products may not be licensed to advise on investments (and vice versa). And while some advisers may be more experienced in certain areas, some will have specific additional qualifications or accreditations that mean they’re better equipped to help with specialist areas, like later-life care home planning or defined benefit pension schemes.

Always choose an adviser that is regulated by the FCA

Question 3: What are your fees, and how much am I likely to pay?

A financial adviser must be open and transparent about their fees before they take you on as a client. Most will ask you to sign a fee agreement, which will detail this information when they start working with you.

Different financial advisers will have differing fee structures. Some will charge by the hour, while others will charge a fixed fee for certain services. It is also typical for advisers to charge a percentage of the funds you are asking them to look after or invest. Again, this will vary depending on the specific adviser, and will usually be influenced by the amount you have invested.

It’s important that you understand the fees and charges you will pay, and feel comfortable with them. Your adviser should be able to provide a projection of what their service will cost not just in year one, but also the years to come.

Question 4: Are you approved by the FCA?

Always choose an adviser that is regulated by the FCA. Ask for their registration number and check it on the FCA register to ensure their credentials check out. You’ll also be able to see whether they’ve had any complaints upheld against them in the past.

Ask the adviser to explain how you are personally protected if anything were to go wrong, and what process they have in place if you wish to make a complaint. All firms authorised and regulated by the FCA must have a process for resolving disputes with their customers, and they should be able to explain this clearly to you.

Question 5: What are your qualifications?

Depending on the areas they’re authorised to advise on, your adviser will need to hold certain qualifications. A financial adviser that offers advice on retail investment products (which includes things like ISAs, pensions and bonds) must have a level 4 diploma in financial advice, as a minimum. This is normally indicated by the letters ‘DipFA’ or ‘DipPFS’ after their name or title.

If your adviser is a Chartered Financial Planner (level 6) or has the Certified Financial Planner qualification (level 7), you can be reassured they’re among the most qualified in their profession. This gold-standard status is usually represented by the letters ‘APFS’, ‘FPFS’ or ‘CFP’ after their name or title.

There are other specialist qualifications, for instance, the Later Life Adviser Accreditation, which would ensure your adviser has an in-depth understanding of the needs of older people, and their care needs.

Always outline any specific needs when you first meet your adviser and ask them whether they have the right qualifications to support them.

Don’t be afraid to ask for references from similar clients

Question 6: What kind of clients do you have?

It’s important to find an adviser that has experience working with people who have similar needs to yours.

For instance, if you’re a high-net-worth individual with a diverse portfolio of investments and complex needs, you want to ensure your adviser has a track record in managing that for other clients. Similarly, if you own a business and want to combine your personal financial planning goals alongside those of your company, you need a planner who is well-practiced in doing so.

Don’t be afraid to ask for references from similar clients. If the adviser has fostered good relationships with existing clients, they will likely have someone you can talk to for feedback before you go ahead.

Question 7: How do you like to work with your clients?

Some people prefer to meet their adviser in person to discuss their financial plan. Other people are happy to have a more remote relationship – something that’s more commonplace following the pandemic, when many IFAs adjusted their working practices to continue supporting their clients. Whichever you prefer, you should discover whether it’s something your adviser can offer.

You also need to discuss how your adviser will keep you up-to-date with valuations and any tax or regulatory changes that may impact your financial plan. Ask how often they recommend meeting up or reviewing you plan (and the fees for this), and how they tend to monitor and react to any external changes.

Question 8: How do you continue to ensure my financial plan meets my needs?

When you start working together, your adviser will create a financial plan based on your circumstances and long-term goals. But because life is a journey, it’s quite normal for these things to change over time, which in turn means your plan will need to be reviewed and adjusted too.

Similarly, your adviser will initially set your risk profile based on your willingness and ability to absorb losses. This, too, will change over time, so it’s worth asking about how they intend to monitor your investments and ensure your risk profile is appropriately set.

Amber River Financial Planning

All Amber River financial planners are IFAs, and they will always offer to meet you before the planning process begins. This will give you the chance to ask any questions, decide if you could benefit from financial planning, and, if so, make sure the person you’re speaking to is the right fit for you.

Amber River has a network of Chartered financial planners, right across the UK. If you want to set up an initial appointment, call 0800 915 0000, or alternatively use our contact form here.