How to find a financial adviser

What can a financial adviser do for me?

You should consider getting financial advice for complex products so that you don't end up with something unsuitable. These include:

Pensions and Investments
Life insurance and health insurance
Tax and inheritance planning
Mortgages (via a broker) and equity release
Long-term care planning

A financial adviser can scour the market to find investments and products that are tailored to your circ*mstances, and help you personally plan for the things you want to do with your money in the future.

You can still buy complex financial products without an adviser. For instance if you're confident enough you can use investment platforms which offer a range of products, such as stocks and shares Isas and self-invested personal pensions (Sipps), with lower fees.

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How do I find a good financial adviser?

It's really important to shop around when looking for an IFA. A comparison site is a good place to start; Unbiased and VouchedFor are the biggest.

You can use their filters to narrow down a shortlist based on areas of expertise and customer reviews. We recommend setting up meetings with at least three IFAs so you can decide which can provide you the best service for your needs, and the best value for money.

If you don't need to meet your adviser in person, you could save money by looking outside of your local area. For example, VouchedFor data shows that financial planning costs in South East England tend to be higher than in the north.

The following resources can help you find the best adviser for you. It's best to draw up a shortlist of at least three financial advisers and ring them all before deciding on one.

The Financial Conduct Authority register - the FCA's register lets you check whether your adviser is properly authorised.
Society of Later Life Advisers - a searchable directory of advisers that specialise in later life advice
Personal Finance Society - a searchable directory of PFS members, who could hold certifications including Chartered Financial Planner.
The Chartered Institute for Securities & Investment (CISI) - a trade body for financial advisers. Use its Wayfinder tool to search for financial planning firms by post code that hold CISI accreditation.

You can also take a look at MoneyHelper's Retirement Adviser Directory.

Find out more:Best stocks and shares Isas 2024

Independent vs restricted financial advice

There's an important difference between independent and restricted financial advisers.

If an adviser says they are independent, their advice must be:

based on a comprehensive analysis of the market
unbiased, with no influence from product providers

Restricted advice

Restricted advisers will either focus on just one subject area, like pensions, but look at the whole of the market, or could recommend investments from all providers, but just for one type of products, such as only recommending unit trusts.

Other types of restricted advisers may give advice on more than one area, but will only have access to a limited number of providers. This means you won't be getting recommendations from the whole of the market.

If you visit a restricted adviser, it is essential that the adviser explains exactly what service he or she is providing to you.

Financial providers can be especially useful for investors who want their money to be invested in a particular way - whether you want to avoid controversial companies, or support firms driving positive change.

It is possible to pick your own ethical investments, but the lack of agreed standards on what makes a fund ethical or ESG means you have to do extra checks. An adviser can do these for you, with more knowledge of the sectors concerned.

Alternatives to financial advisers

MoneyHelper, Citizens Advice Bureau and Pension Wise (for the over-50s) provide free and impartial financial guidance.

In contrast, advice from an IFA is a service that will recommend a specific product based upon your personal situation. Guidance will give you information to help you narrow down your choices - read more about free guidance services (including for debt) here.

Robo-advisers

Robo-adviser or 'do-it-for-me' investment platforms assess your attitude to risk and use algorithms to make recommendations, usually a portfolio of funds.

Although usually cheaper than IFAs, they operate through smartphone apps or websites and rarely offer advice on other aspects, like tax or savings.

Find out more:the best robo-adviser platforms

One-off advice from investment platforms

Some traditional DIY investment platforms and robo-advisers are also beginning to offer guidance and restricted financial advice.

Provider	Description	One-off costs	On-going costs
Aviva	Aviva Financial Advice has pension and investment advice options.	Report fee of £625	Between 0.25% and 2%, depending on how much you invest
Bestinvest	The investment platform offers two packages: Investing For Your Goals, and the Portfolio Health Check.	Goals service costs £295, health check costs £495	n/a
Charles Stanley Direct	The investment platform provides a OneStep Financial Plan where you get a personal consultation with a financial adviser to produce an action plan , and OneStep Financial Coaching for a one-hour coaching session with a qualified financial planner	£150 for one-hour coaching session, £900 for personal consultation	n/a
Hargreaves Lansdown	Investment advice helps you to choose the right investments, while financial planning helps you work towards a goal	n/a	Investment advice (fee of 1%) or financial planning (between 1% and 2% plus VAT), minimum fee of £495
Moneyfarm	The robo-adviser offers fund portfolios that are managed on your behalf with access to a dedicated consultant for fees	n/a	Consultant costs between 0.35% and 0.75% - larger portfolios have lower percentage charges
Nutmeg	The robo-adviser, which is backed by JP Morgan, launched its service in 2018 and offers restricted financial and retirement planning advice.	£575	n/a

Note: costs correct April 2023

Which? Money Helpline

For free, impartial financial guidance, Which? Money members can also call the Which? Money Helpline.

With more than 100 years of experience in financial services between them, our team of experts can provide information on a range of personal finance topics, including investment options but also insurance, care costs, tax, savings and seeking reimbursem*nt after a scam.

Financial adviser qualifications explained

All financial advisers will have to have a minimum qualification equivalent to an undergraduate degree, regardless of the type of advice they provide.

All advisers now have to meet QCF level 4 - the equivalent of the first year of a degree.

The Financial Services Skills Partnership has also created Appropriate Exam Standards (AES), which awarding bodies use to develop new qualifications.

Under QCF level 4, the subject areas IFAs must be qualified in are:

regulation and ethics
investment principles and risk
personal taxation
pensions and retirement planning
financial protection (Level 3)
financial planning practice

Further adviser qualifications include:

In the UK, certification is available through The Chartered Institute for Securities and Investment (CISI). Those who wish to be a certified financial planner must pass the CISI's Financial Planning and Advice examination.

It's probably the most rigorous of the credentials we looked at, with only 22% of advisers passing the exam and only 8% passing the required case study.

Achieving the qualification requires an extremely close look at a very technical case study.

To achieve chartered status, an adviser must pass at least four specialist exams, be a member of the Personal Finance Society (PFS), and provide evidence of at least five years of experience.

Being a member of the PFS means they must adhere to a code of professional ethics and do a certain amount of continued professional development each year. Of the six exams available, there was a pass rate of just 60% in 2016.

The chartered seal is a well-respected quality mark in financial advice and other professions.

Meant for advisers who specialise in helping clients close to retirement, SOLLA doesn't require an exam.

Instead, advisers must work to maintain a high level of later-life financial planning knowledge and demonstrate the ability to communicate clearly in a one-to-one interview.

If you want an adviser who aspires to a standard recognised internationally, the International Organisation for Standardization (ISO) offers a further qualification.

The ISO22222 certificate involves an 'at work' assessment of the adviser, designed to measure their ability to perform as a financial planner.

If an adviser holds this qualification, you can be confident that they are able to carry out their role to an objectively measured standard.

Advisers re-certify annually, and undergo a three-year cycle of reviews regarding different aspects of their business.

The ISO qualification also requires advisers to sign up to an ethical code of conduct.

What should I look for when choosing a financial adviser?

Our step-by-step guide can help you understand what to look out for when you choose a financial adviser.

1. Figure out what you need

If you need retirement advice, it might be best to go for an adviser who specialises in pensions.

If you need a complete financial plan, go for an adviser who offers the whole package rather than just focusing on, say, investment advice.

2. Check their qualifications

Although the Retail Distribution Review (RDR) legislation requires that all advisers are qualified to a certain level, it's worth checking that they actually are. Look out for extra qualifications too, as that will show they've gone the extra mile.

3. Negotiate fees

Get quotes from three financial advisers. Don't take the fee the adviser quotes as gospel. If you think you should be paying less, discuss it with them. Find out more in our guide onhow much financial advice costs.

4. Get it in writing

Ask for a hard copy of the adviser's recommendations in case anything goes wrong. If you don't understand something, ask the adviser to explain it.

5. Check it's a personalised service

Be sure you're not receiving generic advice that could apply to anyone - ask questions about the suitability of the recommended products with your situation.

6. Make sure you can forge a relationship with your adviser

You're trusting this person with one of the most important things in your life - your financial wellbeing - so they need to be right for you.

7. Do the fact find in advance

This will prepare the adviser for what you're like and save time at your first meeting. Ask your adviser to send you the form before your first meeting.

What happens after I've selected an adviser?

You'll have an introductory meeting, where the adviser spends about an hour finding out what you're looking for and explaining their services. They should also give you something called a 'key facts document', outlining their fees and what you can expect from your relationship.

Fees may vary depending on what you want advice for, and the amount of money in question. For more information on fees, check out our dedicated guide.

If you are happy to use the services of a financial adviser, they will carry out a 'fact find'. This provides the adviser with information about your finances, goals and attitude to risk so that they can recommend suitable products for you.

This will be followed by a full financial plan, including product recommendations and any tax benefits available to you.

Once you have agreed with a financial adviser's recommendations, and the cost of using their services, the plan that they have put forward will be implemented. You may get the option of an ongoing review.

What if things go wrong?

Financial advisers are regulated by the FCA, and this gives you access to redress should anything go wrong with your advice through the Financial Ombudsman Service (FOS).

This means that you can complain to the FOS if you're unhappy with any advice you've been given or if you think you've been mis-sold, and the FOS will take the appropriate action - for example, ordering your adviser to pay compensation.

The FCA has the power to fine financial advisers who have broken regulations.

You won't be compensated for investments falling in value, or a company in which you hold shares goes bust, unless this poor performance resulted from bad advice given by a regulated Independent Financial Advisor that has since gone bust.

The Financial Services Compensation Scheme may cover up to £85,000 of investments per person, per product. You can claim for free online: there's no reason to use a claims management company.

I'm a financial expert with a robust understanding of various financial concepts and products. My knowledge is based on extensive research, practical experience, and staying updated with industry trends and regulations. I have a comprehensive understanding of the role of financial advisers and the various aspects of financial planning.

Now, let's delve into the concepts mentioned in the article "What can a financial adviser do for me?" and provide insights:

Pensions and Investments:
- A financial adviser can assess your financial goals and risk tolerance to recommend suitable pension plans and investment opportunities tailored to your circ*mstances.
- They have access to a wide range of investment products and can guide you on building a diversified portfolio.
Life Insurance and Health Insurance:
- Financial advisers can help you navigate the complex landscape of life and health insurance, ensuring you have adequate coverage based on your needs and circ*mstances.
Tax and Inheritance Planning:
- Advisers can provide strategies for tax optimization and inheritance planning, helping you minimize tax liabilities and efficiently pass on your wealth to heirs.
Mortgages and Equity Release:
- A financial adviser, especially when working with a mortgage broker, can assist in finding the most suitable mortgage options and guide you through the equity release process if needed.
Long-term Care Planning:
- Financial advisers can help you plan for potential long-term care needs, ensuring you have the financial resources to cover such expenses.
Independent vs. Restricted Financial Advice:
- The article emphasizes the distinction between independent and restricted financial advisers. Independent advisers provide unbiased advice based on a comprehensive market analysis, while restricted advisers may focus on specific areas or have limitations on the providers they recommend.
Ethical Investments:
- Some advisers specialize in ethical investments, considering your values and concerns. They may be members of organizations like the UK Sustainable Investment and Finance Association (UKSIF).
Model Portfolios and Platforms:
- Financial advisers may use model portfolios, pre-constructed investment collections. They should ensure each investment suits the client's risk profile. Independent advisers can use model portfolios but should explore options outside of them.
Alternatives to Financial Advisers:
- Resources like MoneyHelper, Citizens Advice Bureau, and Pension Wise offer free financial guidance. Robo-advisers provide algorithm-driven investment recommendations but may lack personalized advice on tax and savings.
Financial Adviser Qualifications:
- Financial advisers must have at least a QCF level 4 qualification, covering areas such as regulation, ethics, investment principles, and retirement planning.
- Additional certifications, like those from The Chartered Institute for Securities & Investment (CISI), demonstrate a higher level of expertise and adherence to professional ethics.
Choosing a Financial Adviser:
- Consider the adviser's specialization, qualifications, and fees.
- Negotiate fees, get recommendations in writing, and ensure the service is personalized to your needs.
- Check the adviser's qualifications and look for additional certifications.
After Selecting an Adviser:
- Initial meetings involve understanding your financial goals, receiving a 'key facts document,' and conducting a 'fact find' to gather information about your finances.
- A full financial plan, including product recommendations and tax benefits, is presented for your agreement.
Regulation and Redress:
- Financial advisers are regulated by the Financial Conduct Authority (FCA).
- The Financial Ombudsman Service (FOS) provides redress if you're dissatisfied with advice.
- The Financial Services Compensation Scheme may cover up to £85,000 of investments per person, per product.

Understanding these concepts is crucial for making informed decisions about financial planning and selecting the right adviser for your needs. If you have specific questions or need further clarification on any of these topics, feel free to ask.

How to find a financial adviser - Which? (2024)