How to find a financial adviser - Which? (2024)

What can a financial adviser do for me?

You should consider getting financial advice for complex products so that you don't end up with something unsuitable. These include:

• Pensions and Investments
• Life insurance and health insurance
• Tax and inheritance planning
• Mortgages (via a broker) and equity release
• Long-term care planning

A financial adviser can scour the market to find investments and products that are tailored to your circ*mstances, and help you personally plan for the things you want to do with your money in the future.

You can still buy complex financial products without an adviser. For instance if you're confident enough you can use investment platforms which offer a range of products, such as stocks and shares Isas and self-invested personal pensions (Sipps), with lower fees.

How do I find a good financial adviser?

It's really important to shop around when looking for an IFA. A comparison site is a good place to start; Unbiased and VouchedFor are the biggest.

You can use their filters to narrow down a shortlist based on areas of expertise and customer reviews. We recommend setting up meetings with at least three IFAs so you can decide which can provide you the best service for your needs, and the best value for money.

If you don't need to meet your adviser in person, you could save money by looking outside of your local area. For example, VouchedFor data shows that financial planning costs in South East England tend to be higher than in the north.

The following resources can help you find the best adviser for you. It's best to draw up a shortlist of at least three financial advisers and ring them all before deciding on one.

• The Financial Conduct Authority register - the FCA's register lets you check whether your adviser is properly authorised.
• Society of Later Life Advisers - a searchable directory of advisers that specialise in later life advice
• Personal Finance Society - a searchable directory of PFS members, who could hold certifications including Chartered Financial Planner.
• The Chartered Institute for Securities & Investment (CISI) - a trade body for financial advisers. Use its Wayfinder tool to search for financial planning firms by post code that hold CISI accreditation.

You can also take a look at MoneyHelper's Retirement Adviser Directory.

• Find out more:Best stocks and shares Isas 2024

Independent vs restricted financial advice

There's an important difference between independent and restricted financial advisers.

If an adviser says they are independent, their advice must be:

• based on a comprehensive analysis of the market
• unbiased, with no influence from product providers

Restricted advice

Restricted advisers will either focus on just one subject area, like pensions, but look at the whole of the market, or could recommend investments from all providers, but just for one type of products, such as only recommending unit trusts.

Other types of restricted advisers may give advice on more than one area, but will only have access to a limited number of providers. This means you won't be getting recommendations from the whole of the market.

If you visit a restricted adviser, it is essential that the adviser explains exactly what service he or she is providing to you.

Alternatives to financial advisers

MoneyHelper, Citizens Advice Bureau and Pension Wise (for the over-50s) provide free and impartial financial guidance.

In contrast, advice from an IFA is a service that will recommend a specific product based upon your personal situation. Guidance will give you information to help you narrow down your choices - read more about free guidance services (including for debt) here.

Robo-advisers

Robo-adviser or 'do-it-for-me' investment platforms assess your attitude to risk and use algorithms to make recommendations, usually a portfolio of funds.

Although usually cheaper than IFAs, they operate through smartphone apps or websites and rarely offer advice on other aspects, like tax or savings.

• Find out more:the best robo-adviser platforms

One-off advice from investment platforms

Some traditional DIY investment platforms and robo-advisers are also beginning to offer guidance and restricted financial advice.

Note: costs correct April 2023

Which? Money Helpline

For free, impartial financial guidance, Which? Money members can also call the Which? Money Helpline.

With more than 100 years of experience in financial services between them, our team of experts can provide information on a range of personal finance topics, including investment options but also insurance, care costs, tax, savings and seeking reimbursem*nt after a scam.

Financial adviser qualifications explained

All financial advisers will have to have a minimum qualification equivalent to an undergraduate degree, regardless of the type of advice they provide.

All advisers now have to meet QCF level 4 - the equivalent of the first year of a degree.

The Financial Services Skills Partnership has also created Appropriate Exam Standards (AES), which awarding bodies use to develop new qualifications.

Under QCF level 4, the subject areas IFAs must be qualified in are:

• regulation and ethics
• investment principles and risk
• personal taxation
• pensions and retirement planning
• financial protection (Level 3)
• financial planning practice

Further adviser qualifications include:

What should I look for when choosing a financial adviser?

Our step-by-step guide can help you understand what to look out for when you choose a financial adviser.

1. Figure out what you need

If you need retirement advice, it might be best to go for an adviser who specialises in pensions.

If you need a complete financial plan, go for an adviser who offers the whole package rather than just focusing on, say, investment advice.

2. Check their qualifications

Although the Retail Distribution Review (RDR) legislation requires that all advisers are qualified to a certain level, it's worth checking that they actually are. Look out for extra qualifications too, as that will show they've gone the extra mile.

3. Negotiate fees

Get quotes from three financial advisers. Don't take the fee the adviser quotes as gospel. If you think you should be paying less, discuss it with them. Find out more in our guide onhow much financial advice costs.

4. Get it in writing

Ask for a hard copy of the adviser's recommendations in case anything goes wrong. If you don't understand something, ask the adviser to explain it.

5. Check it's a personalised service

Be sure you're not receiving generic advice that could apply to anyone - ask questions about the suitability of the recommended products with your situation.

6. Make sure you can forge a relationship with your adviser

You're trusting this person with one of the most important things in your life - your financial wellbeing - so they need to be right for you.

7. Do the fact find in advance

This will prepare the adviser for what you're like and save time at your first meeting. Ask your adviser to send you the form before your first meeting.

What happens after I've selected an adviser?

You'll have an introductory meeting, where the adviser spends about an hour finding out what you're looking for and explaining their services. They should also give you something called a 'key facts document', outlining their fees and what you can expect from your relationship.

Fees may vary depending on what you want advice for, and the amount of money in question. For more information on fees, check out our dedicated guide.

If you are happy to use the services of a financial adviser, they will carry out a 'fact find'. This provides the adviser with information about your finances, goals and attitude to risk so that they can recommend suitable products for you.

This will be followed by a full financial plan, including product recommendations and any tax benefits available to you.

Once you have agreed with a financial adviser's recommendations, and the cost of using their services, the plan that they have put forward will be implemented. You may get the option of an ongoing review.

What if things go wrong?

Financial advisers are regulated by the FCA, and this gives you access to redress should anything go wrong with your advice through the Financial Ombudsman Service (FOS).

This means that you can complain to the FOS if you're unhappy with any advice you've been given or if you think you've been mis-sold, and the FOS will take the appropriate action - for example, ordering your adviser to pay compensation.

The FCA has the power to fine financial advisers who have broken regulations.

You won't be compensated for investments falling in value, or a company in which you hold shares goes bust, unless this poor performance resulted from bad advice given by a regulated Independent Financial Advisor that has since gone bust.

The Financial Services Compensation Scheme may cover up to £85,000 of investments per person, per product. You can claim for free online: there's no reason to use a claims management company.