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Should I Use An Independent Financial Advisor?

Should I use an Independent Financial Advisor?

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What does an Independent Financial Advisor (IFA) do?

In short, an Independent Financial Advisor (IFA) will offer advice and information about investments, protection products, mortgages, pensions, annuities, tax structuring and financial planning. If you are just wanting to cut bills, re-jig your finances, or cut credit card debt, a financial advisor won’t be the person to call on. However, if  you’re looking into more complex financial products and don’t have the time or confidence to research the best deals, then help from an Independent Financial Advisor can make sense, for both your sanity and your finances.

What are the fees?

There are many financial advisors out there, so if you are considering using one, then make sure it is an Independent advisor. If you are getting advice from someone affiliated with a certain company or product, they are going to try and sell you that, regardless of whether it’s the best deal. Independent advisors are there to give impartial advice, independent from any company. You pay them either an upfront fee which can range between £75 and £250 per hour or via commission from the product you choose and by law they have to give you the option of either.

Ask around for recommendations

When looking for an IFA, speak to friends and family for recommendations. Some IFAs have different fields of expertise such as pensions or mortgages so make sure the advisor you chose is capable of giving you the advice you need. If you are unsure where else to look, then check out www.unbiased.co.uk, which has a network of thousands of IFAs. Put in your postcode and it will provide IFAs who are local to you. You can also contact the Citizens Advice Bureau, who often have volunteer IFAs or at least point you in the right direction.

Independent Financial Advisor

Research the basics

Try and do a little research into the products you need advice on. While you may not become expert overnight, it helps to know the basics and spot if you think an IFA isn’t up to scratch. Check your IFA is fully qualified. The Financial Conduct Authority requires all IFAs to pass Level 4 qualifications, so look for a Diploma in Financial Planning (DipFP) or Advanced Diploma in Financial Planning (ADFP). These should be displayed in their office or provided on request. Also check they are authorised with the Financial Conduct Authority who will check everything is above board. You can check on the FCA’s website if in doubt.

Ask for an estimate

When you find an IFA, find out how much they charge, if it’s an upfront fee, if you’re paying by the hour and whether the price includes VAT. Don’t be afraid to ask for discount or try and haggle, get quotes from other IFA’s and see if they can match their price – if you don’t ask you don’t get! You will probably need to fill in some basic information before you meet your IFA so then they can assess your situation beforehand, saving you money if you are paying by the hour. After you have got all their recommendations, make sure they provide them to you in writing so you can go over them thoroughly in your own time. Don’t feel pressured into rushing into any decisions and if you are unsure about anything, then don’t hesitate to ask! These are important decisions and your advisor is working for you, so make sure you understand what you have just paid for and ensure whatever choice you go for is the right one for you.

Need to complain?

Finally, if you have used an IFA but feel that you have been mis-advised, then you should start by writing to them stating your dissatisfaction, why you feel you have been mis-advised and send any paperwork in relation to your complaint. If they reply, yet you are still unsatisfied with their response, you may take your complaint to the Financial Ombudsman Service who may award compensation depending on the circumstances and facts regarding your complaint. You must remember that you are complaining about the way in which you were sold a product, not its performance. Investments are very rarely zero risk, so even low risk means there is the chance you may lose money. If that’s the case and you were advised of this, you would have no grounds for complaint – when it comes to investments, it’s just the way the cookie crumbles!

Getting advice from an Independent Financial Advisor can be a daunting prospect; you are judging someone’s expertise on a subject you know nothing about and putting your trust in a stranger when you part with your hard earned cash. So do the research, don’t be afraid to ask questions and make sure the product you end up choosing is the right option for you and your family.




About Rebecca Robinson

About Rebecca Robinson

After spending the last 8 years juggling life as a mum of two, wife and working full time as a Project Manager for a global telecommunications company, Rebecca Robinson made the decision to follow her love of writing and took the plunge; turning her passion into a full time career. Since becoming a full time writer, Rebecca has worked with various media and copy-writing companies and with the ability to make any topic relevant and interesting to the reader, now contributes to The Working Parent on articles ranging from credit cards to teenage relationships. Ever the optimist, Rebecca's dreams for the future include a house in the country filled with children, dogs and horses in the field!

Website: Rebecca Robinson

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