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Have you used the services of a Financial Adviser?
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Posted February 16, 2013 at 10:03AM
Have you ever had the need to seek the help of a Financial Advisor, or considered doing so,whether through a bank or independent outlets?.
If so, what have been your experiences, good or bad, and would those experiences help others seeking advice?.
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Posted February 16, 2013 at 10:28AM
My experience of Financial Advisers is mixed. I used one suggested by my company when I retired and was not overawed; I found another who was, in my opinion, far better.
As a result I consider Financial Advisers to be only as good as their product knowledge and experience. Many are tied to the products they sell and depend on the company(ies) for their wages, others are independent. If you take the advice of an adviser I suggest the first question you ask is whether he/she is totally independent or not - an independent adviser can at least search all potential investments but generally they charge a fee.
When choosing your investment opportunity it is worth doing a bit of research on both the adviser and what is available in the market. There are various sites that may help in this depending what you want from your investment - growth or income - and what level of risk you are willing to take. Recommendation from a close friend or colleague who has experience of making investments or using advisers is also worthwhile.
The old adage about a fool and his money is still very true.
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Posted February 16, 2013 at 10:56AM
I was always taught to use an Independent Financial Advisor. There is probably an organisation to which they belong somewhere. Those working or belonging to banks are limited in what they can do. I think the ones in banks take a commission whereas the independents charge a fee. What we need is an independent financial advisors' advisor.
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Posted February 16, 2013 at 11:20AM
johndrew - What you have said, I agree with you, but I find that its a complicated and perhaps not all that simple for a layperson.
On my own personal experiences, I have contacted an ex-bank manager who was trained in financial advice and pensions, and after speaking to him, I was more confused than ever. I have had on two occasions, friends having a very bad relationship with their 'registered' independent adviser's. One adviser did a runner, leaving his business and clients in a mess. Another adviser went bankrupt. Reading various bankruptcy lists, and it would appear that financial advisers or accountant's are not immune in perhaps giving themselves wrong advice, yet at the same time, charge a great deal for these services to others seeking help and advice?.
The other thing that perhaps turns me off a little, is arriving outside a rather splendid office with the top of the range vehicles parked in the staff bays, and then speaking to someone on a 'timed' fixed appointment,who is obviously very well paid, or appears to be. I tend to think to myself, someone is paying for all this, and it can only be the client!.
There is one website http://www.unbiased.co.uk , but I wonder if this is on similar lines to an insurance company comparison website, and possibly doesn't cater for all levels and everyone?.
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Posted February 16, 2013 at 11:26AM
Bing.alau- "What we need is an independent financial advisors' advisor". But we already have these in the name of Watchdogs, like the FSA and similar bodies. But as we the public have found out, they do not always do the job intended. Or at least, that's my believes and experiences.
So its a case of Catch 22 or going around in circles perhaps?.
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Posted February 16, 2013 at 11:34AM
Financial Advisers have to be qualified and be registered. The rules have tightened up in recent years and spuds' friends should be able to seek compensation nowadays. The rules are also changing regarding the payment of commission.
I've used tied and independent financial advisers. You do not have to buy (invest) in their products. As always if if seems too good to be true then it probably is not a good investment. You need to monitor your investments and don't be afraid to question the adviser. A good one will welcome the questioning. One of my better choices I did without advice and purely through my own research and legwork walking from branch to branch and office to office.
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Posted February 16, 2013 at 11:36AM
ps - If you don't understand how a product works or what the adviser is saying then it is probably best that you don't buy the product.
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Posted February 16, 2013 at 12:15PM
I agree, dealing with investments which affect your personal future is complicated regardless of whether you go it alone or with help. Dealing with another persons money is much easier as there is no personal effect if you get it wrong.
I would always prefer to find those suppliers of investments that have been around a long time (and preferably not been absorbed by a bigger fish) and look at their offerings and how they rate them. From any list developed decide on the investments that most appeal and investigate their performance an stability online - there are several sites that will help, use the investment name for a search. This should help reduce the list to a manageable size (say six) that you are confident with. At this point you need to ask around, friends, bank, building society, accountant to find a good selection of advice/experience of the items chosen. At this point you need to select the person you want to advise you - again contacts may well be able to provide suggestions from experience.
Having done all the above, don't be afraid to ask all the hard questions of your adviser - if he/she is worth their salt they will spend the time to explain in terms you understand. At the end of this get their recommendations in writing with a risk assessment and signed. Again a good financial adviser will have no problem with this.
Remember, nothing is totally free of risk. The lower the risk the lower the return and vice versa. Any adviser can only use your needs/wants to provide recommendations.
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Posted February 16, 2013 at 1:55PM
The rules applying to Independent Financial Advisers are changing at the end of this year, and then changes should make it easier for investors to understand exactly what relationship (if any) their adviser has with financial institutions.
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Posted February 16, 2013 at 2:29PM
OK, this is a really complex question. If you'd have asked me this two years ago, I'd have said, don't waste your money and to an extent, would still maintain that line.
That said, a couple of years ago, I had some very complex pension issues to sort out and in spite of being (officially) classed above average in financial knowledge (I'd completely controlled all my financial issues throughout my life including some quite complex investments), I knew I didn't have sufficient knowledge to address the pension issues.
After considerable research, I found a Chartered Financial Planner, who specialised in pensions and who after meeting, I felt comfortable with and was confident about his depth of knowledge. I make no bones about it, he's expensive, but, if he has saved me from making a terrible blunder, one could argue he's cheap! Chartered Financial Planners are considered to be the elite of their profession and there's only a few of them in the country, so expect to pay. Normally however, they will all offer an initial meeting free of charge to see if they can help you and if you want them to.
Speaking of paying, the financial world is changing and what was known as trail fees (commission) is coming to an end. All fully independent financial planners will be charging fees. They have to be completely transparent about what you will pay. You will get a written summery of all the charges.
To sum up, if you've got a little knowledge and simple investments, do yourself a favour and go to one or two of the excellent financial sites and start learning how to manage your own money. It's really not difficult and mostly common sense and you'll save yourself a fortune. If you've got more complex issues, that you really can't understand fully, find a planner your comfortable with and who you are confident they know what they're talking about. Be aware, there are still a few about that aren't worth a candle and even with minimal knowledge, you should be able to spot those quite easily.
Keep away from any tied planners - banks, building societies, whatever. They can only offer you products from their own stable and are therefore by definition, not independent.
Finally, one of the best pieces of advice I ever read, is if you can't fully understand a product, leave it alone. You can bet your life it's only there for the benefit of whoever is selling it.
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Posted February 16, 2013 at 2:52PM
"Chartered Financial Planners are considered to be the elite of their profession and there's only a few of them in the country, so expect to pay."
For the sake of clarity, there are currently over 20,000 individual Chartered Financial Planners, and 500 corporate members.
It's important to state that Chartered Financial Planners are simply registered members of the Chartered Insurance Institute - they pay to become members, and then pay a monthly membership fee.
Any Insurance practitioner can become an ordinary member, but to qualify to use the prefix 'Chartered' a member must have at least five years industry experience, and have an Advanced Diploma in Financial Planning. People who want to use the title 'Chartered Financial Planner' would join the division within the CII called the Personal Finance Society.
Anyone who works in the financial services field can work for the Advanced Diploma, and provided they were prepared to pay the requisite fees they can join the Personal Finance Society and call themselves a Chartered Financial Planner. There's no additional qualification necessary, and of course lots of people hold the Diploma.
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