Independent financial advisers
Independent financial advisers (IFAs) can, in theory, give you advice on the entire range of financial products on the market. The best will do this, drawing on research to find the best rates for your savings or investments. They will ask you a lot of questions – known as a fact find – which will help them get an idea of what savings accounts or investment funds will suit you.
IFAs can be paid in one of two ways – by commission or fee. Often you can choose how to pay an IFA. If they receive commission, it will be built into your investment and will often work out more expensive than paying a flat fee. By paying a fee – an hourly fee can be anything between £80 and £200 – you also can be sure that an adviser is not favouring one product over another to get the commission.
IFA Promotion can provide you with details of three IFAs in your area. Call 0117 971 1177. IFAP also publishes a free guide on what to expect on your first meeting with an adviser and what questions you should ask. It’s called How To Tap Into 28,000 Financial Products. The Institute of Financial Planning provides a list of its fee-charging members on 0117 945 2470. And there is also a Central Register of Advisers on 020 7929 3652 and a register of fee-based advisers on 01179 769444.
TIP: Talk to two or three advisers and select the one with whom you feel most comfortable. It’s important you feel you can trust your adviser. Also, some advisers specialise in a particular field such as pensions or investment so find out if they can help with your own particular enquiry.
A good adviser will recommend products, such as tax-free Isas, which do not pay him or her a commission. Be sceptical if the adviser recommends that you buy investments bonds issued by insurance companies. These have no real benefits for you, but the adviser gets more commission than if he sold you a unit trust investing in essentially the same thing. Less scrupulous firms of advisers use them a lot. You can check that an adviser is authorised by calling the Financial Services Authority Central Register of Advisers on 0845 606 1234 (www.fsa.gov.uk/).
What if it goes wrong? Complaints can only be about bad advice not bad investment performance. First take your complaint to the adviser. If you can’t resolve it complain to a regulator. Advisers, stockbrokers and investment managers must be regulated by the Personal Investment Authority (0207 538 8860), the Investment Managers Regulatory Organisation (see Financial Services Authority) or the Securities and Futures Authority (www.sfa.org.uk). If you are unhappy with the regulator’s decision, complain to the relevant ombudsman.