How to Choose a Financial Adviser

If you are not able or willing to manage your own finances and investments, it is important to find the right financial adviser for you. These questions will help you 12 September, 2014 | 2:41PM
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This article is part of Morningstar's "Perspectives" series, written by third-party contributors. Here, in a specially commissioned piece for Morningstar’s Guide to Financial Education, Karen Barrett, Chief Executive of explains how to find the right adviser for you.

When taking a look at your finances and asking for help, it’s important you find the right adviser for you.  Someone you can not only work with, but who you trust and who you believe fully understand your needs as well.  If you’re one of the lucky few, this can be a family member, family friend, or an adviser you have been referred to by a trusted source.  If not, you need to know how to look for the right person to suit your needs.

What are You Trying to Achieve?

You may be a dab hand at managing your investments but need help when tax planning or preparing for retirement.  So, what are your long term goals?  If it’s a pension you’re looking for, a pension specialist may be the route you’d like to take.  Perhaps you would like to know the best way to plan for long term care or how best to tailor your investments toward this.  Either way, being clear about what you want to achieve now will help you find the right adviser to plan your future.

How Much are You Willing to Pay?

Fees are an important part of choosing the right adviser.  You want value for money, but you also want good, independent advice.  It can sometimes be worth paying a little more to get exactly what you need.  Speaking with a selection of advisers and companies will give you a good idea of what you can expect to pay and the service you can expect to receive. 

A professional adviser will be able to explain their services and fees to you quickly and clearly.  As a rule of thumb, combined fees should not exceed 1% of your money each year.  If you have substantial amounts it should be less.  Advisers will often meet with you once a year for an annual review and will keep you up to date with regular communication.

What Do You Expect From an Adviser?

Have you thought about qualifications?  All advisers need to hold QCF level four as standard and many will hold higher than the basic, such as, Chartered Financial Planner or Certified Financial Planner.  If you’re looking for advice on a specific area such as pensions or long term care, ask if your adviser holds subject relevant qualifications.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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