Financial Advisors in the United Kingdom

Financial Advisor UK (UK): If you are seeking financial advice for the very first time, trying to find a reliable independent financial advisor in the UK can be a quite daunting experience. Whether you are searching for pensions, mortgage, investment or even insurance guidance, all professional financial advisors are bound by one simple rule; they all have to observe the regulations set by the Financial Conduct Authority (FCA). The benefit of this is that if a financial advisor who is FCA approved gives you bad advice, and anything goes awry, you've got guarantees, and are able to go to the Financial Services Compensation Scheme or the Financial Ombudsman Scheme to get it put right.

A decent starting place when choosing a financial advisor in the UK may be neighbours and friends, but keep in mind that the type of advice you are looking for might be somewhat different to theirs. Every financial advisor isn't suitable for everyone, and any advice they provide should be personalised to your specific situation. It pays to talk to at least three different firms when you're choosing a financial advisor, because this is a big decision, and you will be looking to find one that you feel comfortable with and can trust, and check out the options they can provide.

When you are looking to pick a financial advisor in the UK, there are essentially 2 principal types; restricted advisors and independent financial advisors (IFA). Offering a more extensive range of options, an IFA will not be limited to just one provider's services or products. Independent financial advice must be provided in an honest and impartial way and across the whole spectrum of financial products and companies. Using an independent financial advisor should enable you to choose between the broadest possible array of services. A restricted financial advisor might be tied to products and services from a single company, or may even concentrate on a specific product, as in the case of a mortgage advisor.

Before accepting you as a client, any financial advisor must be fully transparent with you about their charges, as demanded by the Financial Conduct Authority. Determined by the type of product you're interested in, you could be charged by the hour, a set fee or maybe even a specific percentage of your investment. You may be offered the chance of a free first consultation to enable you to discuss your objectives and see if the advisor is a right fit for you and your circumstances. In some of the bigger UK companies, you might find that your account is managed by a team rather than an individual advisor.

To summarise your financial situation and objectives to the advising firm, you will need to complete a "Fact Find" form, which is a confidential disclosure document. You'll also be given an Initial Disclosure, or Key Facts Document, which gives you information on the financial advisor, their situation for offering restricted or independent advice and their scope of permissions in the financial market. If you are not happy with the service provided, and wish to complain, this document will also lay down your own legal rights and the options you can take. It should describe precisely what you're committing yourself to, and any potential risks and benefits that exist should you choose to accept the offered advice, and it must be laid out in clear language. You can find the amount of cooling-off period in this document. Within a certain time period, this enables you to cancel your agreement.

You need to check the experience and qualifications of your financial advisor the first time you speak with them. Do not be self-conscious about asking such questions, after all you are on the verge of entrusting your financial future to their expertise. A Level 4 qualification in financial advice is the minimum qualification for any UK financial advisor, and they must also be able to present you with an annual Statement of Professional Standing. If your advisor's name does not appear on the Financial Services Register, don't freak out, the firm the advisor works for will almost certainly be on the register and their personnel are all covered by the regulations. If they are unable to present this proof, the person can't offer advice but is able to offer financial guidance. Guidance is different to advice as it is not regulated, and if financial errors are made there will probably be no recourse to the client.

If you are seeking advice on investments you'll be asked the level of risk you're comfortable with. Many investments carry some element of risk, but high risk investments could potentially offer better rewards, and also more likelihood of losing some or all of your funds. Good quality financial and investment advice should take you savings aims into consideration, i.e. how much you wish to invest, how rapidly you need access to your money and long or short term investments. "How much money can you afford to lose?" Is the one crucial question that you really need to ask yourself. Generally known as your 'capacity for loss', this will quite likely affect the products and services that you're offered.

If you have already got any current investments, savings, regular outgoings or mortgage loans, you should let your financial advisor know about these. This will provide a full and clear picture of your current financial situation, without which the advice you get might not be the best for you. Good quality financial advice should include diversifying your investments and savings by spreading the risk load across a range of different products. Having a knowledge of the best areas to consider, an experienced financial advisor will concentrate on products that match your goals and financial circumstances.

Communicating in the clearest way possible, your financial advisor will lay bare the multifaceted world of finance and investment. After learning about the services and products which meet your needs, you should be able to come to an informed and educated decision. If you are mind is firmly on the environment, you could perhaps ask your advisor to stick to ethical investment and savings schemes. You will then be able to keep away from corporations that businesses meet your standards, but instead lend your support to those companies and organisations that match your concerns, for example zero carbon or green energy.

Having constant interactions with your financial advisor in the UK could create issues with your work day and other responsibilities. Face-to-face appointments can be supplemented with video conferencing and telephone to allow you to get advice at a time to suit you. Remote and home working is now a large part of our society, and an experienced financial advice company in the UK will have strict measures in place to ensure your details are kept confidential and secure, even if you rarely have a one-to-one meeting with your personal advisor.

COMPLAINTS

The value of your investments could go down as well as up, and this is something that you need to keep in mind. If it just so happens that your investment fails to make the amount of money you were hoping for, it can be an extremely stressful and frustrating time. Regrettably, a downward spiral in your investment isn't seen as a basis for complaint, unless it's down to misleading or incorrect information from your advisor.

The firm's complaints procedure should be the starting point for any grievances, and the Key Facts Document will clarify this. If the advisor is registered with the Financial Conduct Authority, you can let the Financial Ombudsman know about the problem if it is unresolved within the time laid down by the regulating body.

The Financial Ombudsman will independently review the cause for complaint and come to a decision. If it's established that the complaint is justifiable, a decision will be made on how the customer can be compensated. On acceptance by the customer, the ruling becomes a legally binding one, and the advisor and their company must abide by it. Any compensation as set out by the Ombudsman will also account for any distress, inconvenience, annoyance and hassle caused to the customer during the dispute.