Are they an independent or restricted adviser?

Knowing this will highlight what products and services they can offer and from which providers.

What services do they offer?

Some financial advisers specialise in certain areas, for example, mortgages, pensions, and investments. If you’re looking for specific advice, it’s worth checking whether this is covered or whether they can recommend someone more suitable.

How do they charge for their services?

It’s important to be clear about how you will be charged and whether the cost will be one-off or ongoing. If you’re looking for a fund manager, check what service fees there are.

Are they authorised by the FCA?

Anyone giving financial advice must be regulated and authorised to do so by the Financial Conduct Authority (FCA). You can check this yourself using the Financial Services Register too.

What are their qualifications?

Advisers must have a level 4 qualification for financial advisers at the very least.

How to choose a financial adviser

How to choose a financial adviser in the UK

Financial advisers can help you make the most of your money, especially when you’re faced with a major financial decision. As well as helping you save money, they can also provide you with peace of mind by guiding you through the most suitable options for your circumstances.

But finding the right adviser can feel daunting – how do you find one, how much do they charge, and what qualifications should they have? We look at how to choose a financial adviser that’s right for you.

Do you need a financial adviser?

You don’t have to use a financial adviser, and plenty of people manage their own investments and carry out their own research to help them make decisions. But while this works well for some people, using an expert adviser can help you establish your financial goals and advise you on how to help you reach them.

Some of the reasons to consider getting financial advice include:

Long-term financial planning

A long-term financial strategy put together by an adviser can help you determine key financial milestones, such as when you can retire, and how much income you’ll need to achieve that goal.

For example, a financial adviser can also help you decide how much to invest and where to invest it. They’ll also be able to explain how your investment options might compared with other routes, such as paying off mortgages and saving in other tax-efficient areas, such as Individual Savings Accounts (ISAs).

Pension planning

Pensions are a complex area, but an adviser can take you through your pension investment options based on your tolerance for risk. They’ll also be able to consider those investments based on how long they’re likely to be in place.

Although many people have a workplace pension, there are still risks, and it’s important to consider your tax relief options when making contributions. For example, if you fall into one of the higher income brackets, financial advice can be hugely beneficial and help you achieve the correct amount of tax relief.

Retirement planning

Retirement income isn’t just about pensions, and there are various ways you can generate an income when you stop working, including annuities and investment portfolios. You could also consider a drawdown option, which keeps your pension invested while also providing you with an income.

A financial adviser will be able to explain your options based on your assets and goals, while also maximising tax efficiencies available to you.

Life insurance and other protection

Few of us want to think about what might happen if we became seriously ill or if we suddenly passed away. But products such as life insurance and critical illness cover can help ease the financial pressure on loved ones if the unexpected does happen.

An adviser will carefully consider your current circumstances and guide you through the most suitable options based on the level of cover you need. They’ll also be able to explain policy terms so you’re clear about what’s covered.

Deciding whether to consolidate pensions

Moving from job to job can mean you end up with several workplace pensions with different providers and schemes. If this is the case, reviewing what you have with a financial adviser could be worthwhile.

Whether or not consolidating your pensions is right for you will depend on whether there’s a better alternative, the funds available, and any specific benefits they come with, along with fees and conditions.

What are the different types of financial advisers?

There are two main types of advice providers, but both must be authorised to give financial advice by the Financial Conduct Authority (FCA):

Restricted advisers – they can only recommend or offer advice about certain providers or financial products.

Independent advisers – they can recommend or offer advice about financial products across the whole market and from all providers.

Advisers should make it clear whether they are restricted or independent. Usually, you can find this information on their website or in brochures and leaflets. If you’re not sure, it’s best to ask directly so you understand what advice they can give you.

You can find financial advice from a wide variety of sources, including:

Banks and building societies

Some banks and building societies offer some kind of financial advice, but advisers are usually restricted and can only offer products and services issued by the bank or building society. You may find some that offer independent advice, but this is becoming increasingly rare.

Banks and building societies typically offer advice about mortgages, savings accounts, and related services such as travel insurance, which often come with paid-banking services. If you’re looking for more bespoke advice, some will have a ‘wealth’ division aimed at high-net-worth individuals.

Stockbrokers and discretionary investment managers

Stockbrokers and discretionary investment managers manage portfolios on your behalf with the aim of maximising your investments.

Stockbrokers and investment managers can be either restricted or independent – it often depends on whether the firm they work for is tied to a larger organisation or if they’re truly independent.

Financial advice and planning firms

As explained earlier, firms that offer financial advice can be restricted or independent, so it’s worth checking which category they fall into.

Restricted advisers will only be able to provide advice for certain products or providers (or both).

Independent financial planners and advisers focus on providing guidance on your overall financial setup and goals. This could include understanding what you ultimately want to achieve financially and advice on how to do this.

They can also scour the whole market for products and services that suit you and are not limited by providers. IFAs will be able to help you by recommending funds and fund managers from across the market, demonstrating how this can help to achieve your longer term financial objectives.

Alan Boswell Financial Planners are independent financial advisers.

Where do I find a financial adviser?

In the UK, anyone offering financial advice must be authorised to do so by the Financial Conduct Authority and listed on the Financial Services Register.

In practice, many people find an adviser through recommendations from friends or contacts. Other trusted professionals, like your family solicitor or accountant, may offer recommendations.

How are advisers paid?

Advisers set their own fees, which can also vary depending on how they charge. For example:

Percentage-based fees

If you’re investing, many IFAs will charge you a percentage based on the initial investment amount and the ongoing fund value.

Typically, the initial charge is up to 3% of the amount invested, plus an ongoing cost known as the ‘ongoing adviser charge’ (OAC), which is often up to 1% per annum of the investment value.

There are also likely to be underlying investment fund and product/platform charges (in addition to the OAC), which can be up to another 1% pa, making a total annual charge in the region of 2% of the fund value. For example, if you had a £500,000 investment portfolio, the initial charge could be as much as £15,000 (3%), and the OAC would be £5,000 in the first year.

Fixed fees

Some IFAs charge a fixed fee for their services, based largely on the expected time required for the work. Usually, you’ll be given the option of having the fee deducted from the underlying product. In many cases, the fee is VAT-exempt.

At Alan Boswell Financial Planners, we tailor our charges to suit you – as long as our fees are covered, we’re happy to let you choose how to pay from a number of options. For example, for initial work, we usually agree on a fixed fee based on our estimate of the time required. 

We can also carry out ad hoc work as needed or provide regular reviews. If you’re looking for an ongoing review-based service, we can charge an OAC as a percentage. If you choose the OAC option, it is usually calculated as a percentage based on the level of service (typically 0.5% or 0.75% pa).

A step-by-step checklist for choosing a financial adviser

Choosing a financial adviser can feel like an intimidating task, but following these five simple steps should help you find someone you can trust:

Check they are authorised – you can check this by searching for them on the Financial Services Register.

Check they are qualified – by law, they must have a minimum level 4 qualification for financial advisers.

Ask for recommendations – word of mouth from friends, family, or other trusted professionals can often lead to the best results.

Compare at least three advisers – initial consultations are usually free, so use this time to get a feel for each adviser.

Ask questions – don’t be afraid to ask as many questions as you need to find out if an adviser is right for you (we’ve included some suggestions below).

Need financial advice?

Whether you want to speak with one of our advisors or have a general enquiry, we're here to help.

Speak to us: 01603 967967

Must-ask questions for your first meeting with a financial adviser

Authorised financial advisers will be happy to put your mind at rest and answer any questions you may have – for example:

How to choose a financial adviser in the UK

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