Chase de Vere evaluates how to choose a financial adviser


Stephen Kavanagh, Chief Executive of Chase de Vere, says:

“Many people need financial advice, but it can be a real challenge for them to choose the best financial adviser for them. It is important that they get this decision right, because there can be huge differences in the advice, service and charges of different adviser firms.

“Below are the main factors which I believe people should consider when they are making this choice.”

Do you need a financial adviser?

- Not everybody needs professional financial advice. For many people, their basic financial planning should be paying off debts, building cash savings, paying off their mortgage, joining their company pension scheme and understanding the protection benefits provided by their employer.

- However, those with larger amounts of savings and investments or higher earnings can benefit from taking financial advice. Also for those who have certain life events such as taking pension benefits, inheriting money, having a child or getting divorced, then it is usually important to take advice.

How is the advice and service delivered?

- When looking at which financial advice firm is right for you, you need to decide whether you want to meet face-to-face with your adviser, whether you’re happy to work with them remotely by telephone or email or whether you just need some information and then you’re happy to make your own decisions

- If you make your own decisions, even if you’ve received guidance or information, then you are entirely responsible for your decisions. You will have no comeback if it all goes horribly wrong

Independent or restricted advice?

- If you are taking advice you also need to find out whether your adviser is independent or restricted

- An independent adviser can recommend their pick of all retail investment products from across the market. Restricted advisers, as the name suggests, are restricted in what they can advise on or recommend. They can usually recommend only certain types of products or only products from a limited number of providers

- Most of the larger and better-known financial advice companies give restricted advice. This includes the likes of St James’s Place, Hargreaves Lansdown and Tilney.

- Many advisers choose to be restricted because it means they can sell their own products and investment funds. This is understandable from their perspective, but it isn’t such a good idea for clients if their products are expensive and poor value.

What are the charges?

- It is important that you understand how much you are paying, how you are paying it and what level of service you are getting in return. This will allow you to determine whether or not you are getting good value

- The cheapest option might offer a basic service and so isn’t necessarily the right option for you. There can be a huge difference in the advice and service offered by different financial advisers. You need to determine the right mix of charges and service to meet your needs

Professional qualifications

- While all regulated advisers will need to have achieved a benchmark level of professional qualifications, you should understand what qualifications an adviser has in addition to this

- This is particularly important if you have complex needs or want advice on a specialist area such as pension transfers, inheritance tax planning or long term care.

Comfort and trust

- Don’t use a financial adviser who you don’t feel comfortable with and don’t use one if you’re not sure they’re focused on putting your best interest first

- If you have an adviser who you’re not comfortable with, dump them and find a different one

Finding the right adviser

- Ideally you can get a recommendation from a friend or colleague in a similar position to yourself or from your accountant or solicitor, if you have one, although this is still no guarantee of success

- You should ideally contact 2 or 3 independent financial advisers

- You should be able to have an initial face-to-face meeting with each of these advisers which is free of charge. You can then make a decision in terms of which will meet your requirements and give you the best advice and service.

Warning signs to look out for

- If your adviser tries to sell you their own products or investment funds

- If your adviser recommends any products that you don’t understand

- If you don’t know exactly how much you’re paying and how you’re paying it

- If you don’t feel comfortable with your adviser or don’t fully trust them.