I have had my fingers badly burnt by IFAS in the

Hi Sheila,

I’m sorry to hear about your experiences with previous financial advisers. Hopefully, the information below will help you to have better future outcomes.

It’s probably best to break my answer down into two parts:

1. How to build a shortlist of financial advisers.
2. How to filter down your shortlist to find the right financial adviser.

In terms of building a shortlist, with thousands of regulated financial advisers in the UK, the challenge is to keep the list at a manageable level.

Below are some ways of finding an adviser:

• Look at Boring Money's adviser directory.

• Ask friends and family for recommendations.

• Use a search engine.

You may be able to undertake some pre-filtering at this stage before adding an adviser to your shortlist. It’s also worth performing background checks, including checking the adviser's details on the FCA register.

Once you have a shortlist, I’ve listed below some questions to help you narrow your selection. Without further information, I’m not sure what type of financial advice you are seeking, but I’ve structured my answer as if you were looking for advice around retirement planning. Hopefully, this will be flexible enough to adapt to your circumstances.


Question1: Who do you specialise in working with?

This question is probably the most important to ask if you are planning for retirement. Does the financial adviser specialise in retirement planning, or do they offer general financial advice, taking on all clients irrespective of their requirements? If they are generalist financial advisers, will they really provide the same service as someone who deals with clients planning for retirement daily?
To use a medical analogy, if you require heart surgery, will you get the best outcome working with a cardiac surgeon or a General Practitioner (GP)?

The easiest way to check what the adviser specialises in:

-Check their website – it should be very clear who they work with.

-Call them: Most financial advisers will gladly give up fifteen minutes of their day for an introductory phone call to see if they are a good fit for your needs. Some questions for you to consider asking include:

• What clients do you specialise in working with?

• What benefits can you bring to help a client plan their retirement?

• How would you help me manage my retirement income to have the best chance of not running out of money in retirement?

Question 2: Are you Independent or Restricted?

It is important to understand what financial products and providers the financial adviser you are considering can recommend.


Question 3: How many clients do you have?

There is no doubt that technology is helping financial advisers to do their job more efficiently. The right financial planning tools save a lot of time. Couple that with more online meetings taking place, and you can see where time savings can be made. That said, some believe that it is challenging for an adviser to support a meaningful relationship with more than 100 – 150 clients. Considering the client meetings, preparation for these meetings and the ongoing relationship, it is easy to see how time can be used up.

Questions to ask:

• What is the scale, scope, and frequency of your interaction with your clients?

• How many clients do you look after?

Question 4: How do you charge for your services?

You could write a whole book on adviser charging, and it’s fair to say that it can be tricky to work out exactly what you are paying.

Questions to ask:

• Can you give me a breakdown of total fees for both initial and ongoing financial advice in pounds and pence?
• How much goes to each part of the chain for these fees, and how do you justify these?
1. Financial adviser
2. Platform
3. Fund manager
4. Fund manager transaction costs
5. Discretionary Investment Manager (where appropriate)
• Do you charge exit fees?
• Do you get paid for giving me financial advice even if I do not proceed with your recommendation?


Question 5: Can you describe your retirement planning process in detail, and what are your specific retirement planning qualifications?

One of the benefits of working with a financial adviser with a specialism/niche is that they (hopefully) have a clearly defined and efficient process, giving you the best outcome.

Questions to ask:

• Can you describe the stages of your retirement planning process and how much time/effort is typically spent on each stage?

• Can you provide me with a document describing the retirement planning process in detail?

• How do you ensure the financial plan is robust? Is there a degree of iteration, and what 'what-if scenarios' do you typically create?

• What software do you use to make your job easier?

• What retirement planning qualifications/expertise do you have?

Question 6: You might plan to work with the same financial adviser for many years as they help guide you through retirement. However, there is always the chance that the financial adviser you are considering working with may unexpectedly not be able to work or decide to retire. This may be fine if you are working with a firm of many financial advisers (and you can find someone else in the firm you are happy working with), but less so if you are working with a 'one-man band'.

Questions to ask:

How many financial advisers does your firm have? If the financial adviser is a sole adviser, it's worth understanding what locum arrangement is in place.
How many years do you plan to do this for? When you finish working, will you sell the business, and what will happen to your clients?


I appreciate the above is a lot of information to absorb, but I hope you found it useful. Chapter 5 of my book (“Planning for retirement: Your guide to financial freedom”) covers adviser selection in more detail.

Please feel free to get in touch if you have any questions on the above.

Noel

This answer is for informational purposes only and should not be relied upon for advice.