Should I pay an independent financial advisor or get free financial advice online?

You’re thinking about tidying up your finances. Great! But should you pay a professional to help you? Or would a few free tips be enough to get you started?

What’s the difference between free and paid-for financial advice?

Do I really need to pay someone for some solid financial advice? Can’t I just ask Siri, or look it up on Wikipedia? Well, that depends on what you’re after…

Technically, ‘financial advice’ is a regulated service, where a qualified professional looks at your specific circumstances and helps you work towards your specific goals, applying their knowledge of the ins and outs of financial products and markets. They are making personalised recommendations based on what they know about you.

You need to be certified to give ‘financial advice’. And to call yourself an ‘independent financial advisor’ you can’t favour one provider over another and have to scour the whole market. All advisors' income today comes from clients paying charges, not companies paying commission. This is now very clearly separated out and disclosed. Or it should be.

Free financial advice online, on the other hand, isn’t ‘advice’ at all – and anyone calling it that could get in trouble. Really, online guides and tips and articles)and listicles and calculators are just useful nuggets of fact and opinion, generalised and simplified, to point you in the right sort of direction. But by definition this is generic and doesn't take into account your broader situation.

Boring Money’s blogs and learning paths and tribes fall into this category. They’re free, they’re super useful starting points, but they’re not tailored recommendations based on your circumstances. We can tell you about investing, for example, but we don't know if you have massive and expensive credit card debt, in which case the obvious first point would be 'Don't worry about investing – get rid of that debt!'.

Do I need an independent financial advisor or not then?

Free financial advice online is fine for:

• Introductions to which types of financial products are available and what they do

• General tips, approaches and checklists

• Best Buy lists of popular or rated investments, providers or accounts

• Calculators and tools to help work out some facts and figures

But you should really consider paying for:

• An in-depth look at which financial products are most suitable for you

• Specific plans or strategies that help you achieve your finance and life goals

• Recommendations of specific providers and accounts that suit you personally

• Personal, holistic guidance on how to best manage your estate, invest a large lump sum, or become more tax-efficient

How much does a financial advisor cost?

Independent financial advisor fees range from around £200 for a one-off consultation to £1,500+ for a comprehensive financial life plan.

If you just want a few questions answered about how to achieve your financial goals, a one-off session might be enough.

But if you want a complete road map drawn out all the way to your pension and beyond, or if you want someone to just do it all for you, a longer-term relationship might be best.

Intro sessions are often free, giving you a chance to get to know the advisor. This is a great idea, because you really want someone who can relate to your circumstances and understand your goals. If you don’t click, trust your gut and try someone else. It’s not a cheap service (although people often say it's worth every penny) so avoid committing to someone you’re not happy with.

An unsavoury truth is that it’s hard to find an independent financial advisor if you have less than £100,000 to invest and in your pension. This isn’t always the case but people with smaller savings will struggle to find a full-time advisor.

More and more people want one-off advice for a fixed fee – don’t be afraid to pick up the phone and ask a local recommend advisor if they will do this.

Where can I find a good independent financial advisor?

You can find advisors who specialise in pensions and retirement, savings and investments, divorce, mortgages, inheritance and all sorts. Once you know what you want help with, you can compare financial advisors on independent ratings sites like VouchedFor.

We hope that helps to clear things up a bit! Remember, money tips and guides are a great place to start when getting to grips with everything or double-checking before you make a move – you can even ask your own basic questions here on our site. But if you want the personal treatment or a proper in-depth and considered plan, then we really do recommend an independent financial advisor.

Next up: 6 things to consider when choosing a financial advisor