What Can a Financial Adviser Do for Me?

The trend for DIY has risen dramatically over the last few years, but there are certain occasions when it pays to call in the professionals. The same rule applies to managing your finances. If you do not have the time or the know-how to manage certain aspects of your financial situation, then a financial adviser could provide the help you need.

The Benefits of Using a Financial Adviser

Financial advisers are fully qualified professionals who have access to a massive amount of information on financial products, such as mortgages, investments, pensions and insurance, and the sophisticated tools at their disposal.

They also have the financial knowledge and business acumen to help to analyse this information and are able to suggest the right financial products for you.

What Can an Adviser Do For You?

Financial advisers can assist you by offering you help with advice on just about any aspect of your financial situation.

Before offering any advice, the adviser will look to find out more about you, building up a picture of your personal circumstances by conducting a ‘fact find’ interview. This informal interview will look to focus on the following:

1. Your current financial situation: your earnings, your outgoings, your investments (including your house, if you own it) your family status (including any dependents) and your income tax bracket.

2. Your financial goals: what you are hoping to achieve with any savings and investments you make, both in the short-term, and long-term.

3. Your attitude or ‘appetite’ for risk: which means are you naturally cautious with your savings and are willing to accept a lower rate of return on your money, or are you prepared to put your money into more risky investments in order to achieve a better return.

Once the financial adviser has all of this information, they will be able to complete the fact find and give you a much clearer picture about what your personal circumstances are and what he suggests you can do to achieve your objectives.

What Type of Advice Is Available?

In the UK, financial advice is available from a variety of different sources. However, as with any major profession that charges for their services, all financial advisers have to be professionally qualified to give advice and be regulated by the Financial Services Authority (FSA).

Financial advisers are usually broken down into two categories: tied advisers and independent financial advisers (IFAs).

Tied Advisers

Tied advisers are employed by a financial services provider (such as a banks or building societies) and can only give advice on the products sold by that particular company, or in the case of ‘multi-tied’ advisers, from a range of companies.

Tied advisers get paid by commission on each product sold, by the companies that they are tied to. This means that you do not pay for the advice, but as your adviser is tied you may not be getting the most competitive product available from the entire marketplace.

Independent Financial Advisers

Known as IFAs, independent financial advisers are not tied to any particular product provider. This means that they are free to offer advice on products across the entire marketplace.

Some IFAs offer specialist advice on specific areas, such as tax or pensions. They can be paid via commission, but many charge a fee for their advice (usually by the hour, such as solicitors or accountants).

In these difficult times for savers and borrowers, now more than ever it is important to receive professional advice.