What is Financial Advice?
It does exactly what it says on the tin – straightforward advice on making the most of your money, or planning for your future.
What sort of areas does Financial Advice cover?
A financial adviser can give you advice on all sorts of areas, such as making the most of your investments (including your ISAs and other savings), finding the right mortgage, helping you with estate planning and recommending ways to become more tax efficient. A financial adviser will also be able to recommend different types of insurance and protection, such as life insurance and critical illness coverage.
How do you pay for Financial Advice?
Most financial advisers will be happy to have an initial meeting with you free of charge. During that meeting they’ll explain any future payments you’ll be expected to make. Most financial advisers charge an hourly fee, but if you have more complicated financial advice needs, they might charge a flat fee or even a percentage of the amount you’re planning to invest.
The first meeting will be all about getting to know you, understanding your needs and also how you think about money. For example, they’ll ask you about your attitude towards risk, and your financial goals. The aim is to make sure that any recommendations they make are right for you.
After the initial meeting, the financial adviser will usually put together a proposal based on what you discussed. If they make any recommendations, they’ll explain the reasons why, as well as inform you of any fees and charges.
What’s most important to remember?
A financial adviser is legally obliged to tell you whether they can give you ‘independent’ financial advice or ‘restricted’ financial advice. Independent advice means the financial adviser is able to search the entire marketplace to find the right product or service to suit your needs. They’ll make a recommendation based on an impartial view of the market. Independent financial advisers are (rightly) proud of their independent status, so they’ll definitely mention it!
A financial adviser who is ‘restricted’ will only be able to offer you certain types of products from a smaller selection of one or more product providers that the financial adviser has a prearranged business relationship with. These products might still be the best option for you, but the selection process is much more limited. It’s quite common for restricted financial advisers to specialise in one particular area, such as mortgages or insurance. Either way, all financial advisers must achieve a level of professional qualifications and expertise.
In our experience…
Financial advice is a good place to start if you have specific financial issues you need help with. But if you’re looking for a deeper relationship, you have lots of money to invest or you have more complicated financial arrangements, you might want to think about other options. Don’t worry, we’re here to point you in the right direction.