Savings tips

How to go about finding an investment advisor that you can trust

by Dakota Murphey

With a competent financial advisor by your side, you can make informed decisions about your investment and wealth planning. But how do you go about finding someone who will give you professional advice that’s in your best interest, and find financial products that deliver the best return for you?

Start by asking the right questions and do some research.

Check professional qualifications and experience

Before you instruct any financial advisor, be sure to check their qualifications and level of experience. By law, investment advisors must have Financial Conduct Authority (FCA) endorsed professional qualifications such as an FCA recognised Diploma in Financial Planning (DipPFS), a Transitional Qualification and gap-fill, and a valid Statement of Professional Standing (SPS). In addition, they must have at least 1 year’s supervised (or 3 years’ unsupervised) experience in Financial Planning and be on the FCA register.

Ideally, you want someone who is a Certified Financial Planner (CFP) or a member of the Chartered Insurance Institute (CII) as indication of their serious financial planning credentials.

Choose an independent advisor

An independent financial advisor (IFA) is a free agent able to work on your behalf offering impartial advice. This means that he has access to the whole of the financial market when selecting the most appropriate products for your requirements, rather than having to select products or investment vehicles from specific providers.

Some IFAs are restricted advisors, meaning they specialise in a single area of personal finance, offering advice on a limited number of products of from a specific list of companies.

Make sure you know even before your initial consultation whether your shortlisted IFA will be able to offer whole of market or restricted advice. Even restricted advisors must still be FCA accredited and objective in the financial advice they provide.

Should you be unfortunate to receive ‘bad’ investment advice from an IFA, you can seek redress and claim compensation from the Financial Ombudsman.

Which financial areas do you need help with?

An IFA will take a broad look at your current circumstances and lifestyle and gain an understanding of your financial goals, taking into account things like savings and investments, mortgages and loans, pensions and insurance policies. They will also examine how you can make your finances more tax efficient.

Restricted financial advisors will look at products that are within their specialism to recommend the best option for you.

Where to look for a good local investment advisor

Once you’ve identified the type of investment advisor that would be suitable, the next step is to make a shortlist of professional advisors that you might like to contact.

Personal recommendations are always a good starting point. A good recommendation from a trusted relative, friend or colleague can be invaluable, as it will give you a first positive endorsement of the person’s character and ability. It should go without saying that you should verify any IFA recommendations on the FCA register.

If you’re unable to get a recommendation from a trusted person, there are online services you can use such as VouchedFor or Unbiased to search for local, trusted companies.

What to get out of the initial consultation?

Arrange a short meeting — usually a free consultation — to find out a bit more about your shortlisted financial advisor and to see how they might be able to help you. It helps if you have a clear idea of your financial goals and some inkling of how you would like the IFA to help you achieve this. Take an overview of your current financial information along to the meeting.

The first consultation is an excellent opportunity to verify the research carried out earlier regarding their qualifications and experience, areas of specialisation etc, but it also allows you to gauge the personal chemistry between you. Having a good rapport with someone as important as your financial advisor is an important element of any long-term professional relationship. If you don’t like your IFA on a personal level or the way he does business, how will you feel comfortable discussing your finances with them, never mind trusting or valuing their advice?

How much will it cost?

Whether your financial advisor is independent or restricted, they must be transparent about the fees they charge for their services, so that you can compare prices and make an informed choice. Ask for a confirmation of their hourly rates including VAT, and an estimate of upfront and ongoing costs.

Also establish whether ongoing advice will be provided face-to-face, over the phone or in another way? What about regular reports and periodic reviews of your finances? Exactly what and how you pay depends on the scope of the advice provided, and the pricing structure agreed between you and your financial advisor.

About the writer:

Dakota Murphey has over 10 years experience working with both small and large businesses. Having a wealth of knowledge surrounding startups and business growth she enjoys sharing what she’s learnt through her writing. Recently, turning her hand from helping to scale businesses towards more personal finance and budgeting for young professionals. See what else Dakota has been up to over on Twitter: @Dakota_Murphey


Oleksandr graduated from Dnipro National University of railway transport in Ukraine. At first, he was a customer success manager at PocketGuard and in 1.5 years has been promoted to product manager....

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