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Have you used the services of a Financial Adviser?


spuds
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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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Woolwell

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wiki Independent Financial Adviser

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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Woolwell

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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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johndrew

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spuds

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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Forum Editor

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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.

Take a look at this unbiased and informative guide to choosing an adviser.

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LastChip

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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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Forum Editor

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LastChip

"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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LastChip

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Then that has expanded rapidly in the past 14 months. When I originally researched that title (2+ years ago), I think there were less than 100 or so.

Research a few moments ago reveals at the end of 2011, there were only 2792*, with only 362 firms qualifying, so a sudden jump to over 20,000 is quite remarkable. Though quite were you got that figure from I'm not sure.

*CFP's

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spuds

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No doubt about it, this subject can be a complete minefield for the unaware. Even contacting some of the organisations who offer advice or otherwise, can still leave you confused.

One thing that made me raise this subject, was something that was completely alien to me, before this morning. Apparently pension companies holding pensions that are not being used, but placed on hold as a future investment or inheritance, are subject to Standard Lifetime Allowance (SLTA) if not activated by a certain time or age, which could possibly incur a 25% deduction for tax payable to HMRC.

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Forum Editor

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LastChip

"Though quite were you got that figure from I'm not sure."

Apologies, I should have stated that figure (20,000) is the worldwide number, the UK figure was, as you say, 2792 a year ago. There are 100,000 members worldwide, but of course not all of them are Chartered.

Apologies again for the confusion. The point I wanted to make clear is that it is the Institute which says that Chartered Financial Planners are considered to be the elite of their profession. I don't say that in any derogatory sense - the Institute is a highly respected organisation, and its qualifications, specifically in the insurance field, are recognised worldwide.

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LastChip

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Ah! Thanks FE, that makes more sense.

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