How can I find a good financial adviser?

Here are some ways in which you can look for a good adviser who will watch your back, help you out and generally be on your side, helping you achieve the things you want to with your money.

Word of mouth – This can be the most reliable way to find a good financial adviser. However, it is worth ensuring that your needs and expectations are similar to the person who is recommending the adviser. If your friend or family member is an entrepreneur and you are a salaried professional, your needs may be different. Equally, if they are extremely rich, and you are – ahem – not so rich, then it may be worth seeking out your own options.

You can now find

financial advisers that cover your area. Financial advisers will also have individual websites where you can look at their qualifications and experience and judge their expertise for yourself. Usually financial advisers will do the first ‘fact find’ meeting for free, so you can judge whether you like them.

Product area – As with accountants and solicitors, financial advisers have different specialisms, such as retirement planning, investment or mortgages. They may offer a generalist service, providing an initial financial plan and then referring on to a trusted bank of specialists according to their clients' individual needs.

Qualifications - Advisers need to have a minimum qualification to be able to deal with clients - QCF Level 4, but many advisers have chosen to secure higher qualifications. This might be to QCF Level 6 or towards the higher level of certified or chartered status. This should be clearly displayed and if it isn't, you should ask why.

Chartered - Some view chartered financial planner status as the ultimate status. Others say that experience is more important than qualifications. It is certainly true than anyone with chartered status will be very technically able.

Cost - Different advisers have different charging structures. For example, some will charge a percentage of assets under management, others will charge a fixed fee. The very average rule of thumb is that advisers charge about 3% for the upfront advice which tends to take a lot of time and then 0.5% - 1% a year for the ongoing work and management. Advisers now are obliged to cost out their fees very clearly and some may also agree to do ad hoc work for an agreed hourly fee. Depending on where you live, £120 - £200 is the normal range. £150ish an hour is average.

Gut feel - It is all very well being ruthlessly practical, but you will have to share some intimate details with your adviser and it is important that you like them. This is especially true if you need to see an adviser because of emotional stuff going on such as a divorce. Ensure that you like them and are happy to talk about your situation, your financial needs and your hopes for the future.