Getting a good financial advisor is quite challenging, especially when there is a lot of information flooding the internet, and unfortunately, most of that does not seem to be enough. The FCA has already warned that bad advisors are out there. So you should choose the one with great wariness. According to research, one in four has admitted that they have been forced to buy a financial product without completely understanding what it that led them to lose their hard-earned money following the recommendation of an advisor. Independent financial advice is exorbitant, too.
The subject of money is personal and emotive, and therefore when vulnerable people fall prey to bad advice, they lose trust. There are various websites talking about budgeting, saving and investing money. They have a lot of information. Is that useful to make a decision?
According to Justin Modray, the founder of Candid Money, such websites are useful to get information. For instance, if you are looking to find information about pensions, you can find a number of ways to build pensions. However, if you are in a serious situation and looking to make big decisions, you will have to be cautious while taking advice.
Tips to find a good financial advisor
Although the market is brimming with bad advice, you must have your financial angel who helps you make your money work for you. You will have better clarity of where you stand and work upon a strategy to grow your wealth. Here are the tips to find a good financial advisor:
Where should you start?
There is no one-size-fits-all approach, nothing like recommendation. Charity begins at home. Your way of finding an independent financial advisor will not be different from that of others. Ask your friends or family if they are already consulting an advisor and what they think of them. Recommendations can help you know about a good or reputed independent financial advisor. However, it is not set in stone to act upon their advice because financial advisors often request their clients to recommend them to others and do not mind offering some additional benefits in exchange for that. Use your brains.
There could be some people who do not know much about financial matters or hardly do they consult advisors for big financial decisions such as mortgages and major investments. Therefore, they cannot be the judge of the quality of their service. Before you act upon their advice and suggestions, you should understand their purposes for being in touch with their advisors. If you do not feel that the advisor may help you in some way, you should walk away.
Where can you get a recommendation?
After friends and family, you should turn to the press to get recommendations for a good advisor. Journalists often conduct interviews with financial advisors. You can find several interviews on BBC Sounds. The Financial Times, The Guardian and The Independent are trustworthy sources to gather information about financial management and financial advisors.
By listening to their interview, you can easily figure out they know their stuff. A good financial advisor is one who knows all aspects of finances inside out. It is about your money and you would certainly not want to end up with bad advice. Repercussions could be worse. This is why you should try to contact a financial advisor who has a strong knowledge of financial trends and money management.
What else should you do?
There is another way to look for an independent financial advisor. There are several online services that let you connect with reputed advisors. For instance, you can visit www.defaqto.com/, which has a dedicated section to find financial advisors. You can choose the one based on the region. It is not mandatory to pick them for your concerns. It is vital to analyse whether they will be able to help you. If you are not sure, you should not consult them. You should always listen to your gut feeling.
If you have found the one that you think will be suitable to your financial circumstances, the next thing is to check:
- If they are registered with the FCA?
- Are they an independent financial advisor?
- How much do they charge?
- How do they charge?
- How long they have been in this business?
- What areas do they target?
- Have they got their qualification?
- Are they able to show you some references?
All these questions should be asked if you do not want to end up getting bad advice. No financial advisor is allowed to advise unless they are registered with the FCA. Understand how they will charge you. Financial advisors can charge money through two methods – upfront fees or earning commission on the financial product offered to you.
It is hard to come down on one side of the fence or the other when it comes to picking one of them as a better charging method, but many people trust their advice when they pay upfront fees. This is because your advisor is more likely to act in your best interest rather than aiming at selling a financial product to you.
Do not forget to check if your financial advisor has experience in dealing with the area of your concern. For instance, if you are looking to get some advice on debt management or how to obtain better deals on unsecured loans for bad credit from a direct lender or a mortgage or a car loan, you should choose an advisor who has experience in dealing with such queries.
What else should you know about them?
Even though a financial advisor is claiming to be independent, you should find out if they are truly independent. Some might be working with companies and they will be allowed to recommend only their products. This kind of financial advice cannot be good for you at all. You should ask them if they are linked to any companies, and if they are, you should avoid consulting them in spite of them claiming they have other products as well to offer. You cannot take their words exactly.
Are you comfortable with your advisor?
Of course, you are sharing your personal information with someone, so you would have to ensure that you are comfortable doing so. During the conversation, check if they make you feel comfortable. Discomfort and anxiety will not let you establish your connection for a long period of time.
The bottom line
Finding a good financial advisor can be quite tricky, but it is not impossible as well. First off, you should take referrals from your friends and family. Get information from newspapers and interviews with notable financial advisors.
When you find an advisor, you should ask questions related to their experience, services and, above all, whether they are independent. Having clarity about areas they deal with and their experience will let you know if you can benefit from their service.
