Five questions to ask your financial advisor

David Hill INLT 45-099-PSB
David Hill INLT 45-099-PSB

With a wide variety of financial advisers to choose from, there are five questions you should ask before selecting one.

1. Are you regulated by the FCA?

This may seem an obvious question, but each year millions of pounds are lost in unregulated scams such as carbon credit trading, often as a result of cold-calling over the phone. To be sure you are receiving regulated advice, check the FCA register at www.fca.org.uk/register. A regulated adviser has to follow a set of rules, is responsible for the advice given, will have professional indemnity insurance and for regulated investment advice, you will have access to the financial services compensation scheme and the financial ombudsman scheme. We have recently seen a massive increase in fraudulent telephone calls from unregulated advisers, particularly in relation to the pension freedoms.

2. What specialist qualifications do you have?

The minimum qualification standard for financial advisers is diploma level. Some advisers have specialist pension qualifications to allow them to advise on pension transfers. There are a few advisers who have become Chartered Financial Planners, which is a qualification based on several of the specialist exams. Always remember to seek advice from someone who has qualifications and experience that are appropriate to your own circumstances.

3. Are you independent?

There are broadly two different types of financial advisers. Firstly there are independent financial avisers who have a duty of care to research the whole market place and provide the best solution appropriate to your individual circumstances. Other adviser firms, such as St James Place and most banks, are classed as “restricted advisers” which means they are limited in the solutions that they can offer.

4. Do you use wrap platform technology?

The days of having a filing cabinet full of old policies, investments, share certificates and valuation statements are behind us. The current wrap technology that is used by many independent advisers allow all of the investments and shares to be electronically and securely held in one place with online access and one simple statement instead of many valuations arriving throughout the year. This makes monitoring and managing your finances so much easier and a good wrap platform can hold any tradable share or fund on the market.

5. How often will you review my financial plans?

As governments, economies and regulations are constantly changing, it is important that your financial plans are continually monitored and kept up to date to ensure you continue to get the most appropriate advice. Financial planners should monitor and review investment portfolios every day because things change and when they change, they change quickly.

David Hill is a Chartered Financial Planner and Independent Investment Adviser at Hills Financial Planning, 15 Agnew Street, Larne. He can be contacted on 028 28276814, email david@hillsfinancialplanning.co.uk or see www.hillsfinancialplanning.co.uk