What You Should Ask a Financial Adviser?

Before you seek advice, consider these questions in order to make sure you get the right adviser for you

Grace Oliver 9 September, 2021 | 9:16AM
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There comes a point when building your portfolio when investors should really consider getting financial advice. While from the outset it may not seem as accessible for those with smaller investment or retirement pots, there are certainly options. Before you seek advice, consider these questions in order to make sure you get the right adviser for you. 

Some Key Questions:

What is your charging structure?

A financial adviser should always be upfront about their costs. Ask straight away for their charging structure. Many will charge on a percentage basis but there are some who will charge a flat fee or hourly rate. Many advisers will give the first hour free and there are even some who do pro bono work. The Financial Conduct Authority says the average investor is looking to pay around 2.4% for initial advice with a further 0.8% for ongoing advice. Make sure you really need ongoing advice before signing up for it. 

Do I need to involve my family?

The majority of cases will be on an individual level and families won’t need to be involved. It should be considered, however, with elderly clients so the family is aware of where the money is held. It is not a bad idea to involve family but ask the adviser what they think to be best. Older children might be worth bringing along to a meeting; it may encourage them to start investing and seeking advice from an earlier age. 

If you are restricted, how could it affect me?

Financial advisers fall into two categories - independent and restricted. Independent advisers offer everything available on the market, while restricted advisers are exactly that and make decisions from a smaller list of providers and products. The range is restricted advisers varies massively and depends on each adviser. What you should ask is how the restriction could limit you. For instance, are they restricted to certain providers? Or is it that they just don’t look at products such as ETFs or index funds? Research limitations but don’t discount them purely for the lack of independent title. The restricted adviser should also be honest and say if their products are not suitable for you and suggest you seek advice elsewhere.  

What happens if you retire/company is acquired? 

Many financial advisers work out of very small companies or even by themselves. If your adviser is of an older age it might be worth asking the company’s plans for retirement or succession planning. While it should not affect you directly, it is worth noting their plans in case the adviser you speak to and built trust with chances. 

What is the cost of ongoing versus one off advice?

Weigh up the cost of ongoing advice versus a one off visit. There are pros and cons to each. If you have a smaller pot, ongoing advice may prove to be expensive. One off advice can be used to set up goals, discussing inheritance and reorganising your financiers. While ongoing advice can be used for retirement planning, retirement income and ensuring you aren’t paying too much tax. 

It should also be worth remembering that you are under no obligation to take the advice or stay on as an ongoing client. 

How do I know my money is protected? 

Your adviser should always inform you about what happens in the event of failure. While your money cannot be guaranteed, there are options for whether you have been mis-sold an investment, or if you want your money protected by the Financial Services Compensation Scheme (FSCS). Financial advisers will always recommend spreading your money across different investments but it is always safe to see how your money is protected. 

Are you able to invest in line with my beliefs? 

With the rise of certain thematic investments such as Environmental, Social and Governance (ESG) funds, it may be that you solely want to invest in line with your philosophies and beliefs. Make sure the advisers have the option to do this and be able to keep your views in mind. If they cannot, there will be others who can and specialise in more thematic investments. 

What type of investments do you favour? 

Even independent financial advisers will have a preference over the type of fund in which they like to invest. The active versus passive debate is still ongoing and there are many pros and cons for each side. Check where the preference lies and whether you are comfortable with that given your investment goals. 

Where is your money invested?

There is nothing wrong with asking a financial adviser where they put their money. For instance, many fund managers put their money in their own funds as proof of their belief in their strategies, so it is almost certainly worth asking an adviser where they put their money to see if they have courage in their conviction. 

While it is not a direct question to ask, it is always worth doing your own checks on an adviser. For instance use Trustpilot for the bigger firms, and Unbiased or Vouched For to see what clients are saying. Others may have Facebook or Twitter pages so it might be a good idea to check what people say before you make the jump. 


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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Grace Oliver  Grace Oliver is a freelance financial journalist

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