At some point in life, we all require financial advice. Whether you’re stuck on where to invest your money, finding it hard to save some extra cash, looking to finance a new purchase or trying to map-out your retirement, there’s an array of financial decisions that require thorough consideration to ensure a well-informed choice is made – after all, in situations like these, it’s easy to assume that you’re often dealing with substantial sums of money.

Seeking financial advice is subsequently a sensible move for people at all stages in life. With that in mind, let’s take a closer look at when and where is best to source it, ensuring you keep making educated economic decisions that keep your finances on track…

Financial advice or financial guidance?

Before requesting a consultation to discuss your money matters, it’s important to understand the difference between financial advice and financial guidance.

In short, financial advice offers many more specific recommendations than financial guidance does. While financial advice will provide you with information about particular products and services that best suit your personal requirements, guidance will simply provide you with an overview of all available products and services.

Where to get financial guidance

Financial guidance is often offered by independent advice charities or government-backed programmes like the The Single Financial Guidance Body (SFGB). It’s worth noting, however, that independent and impartial financial guidance services are not regulated by the Financial Conduct Authority (FCA).

Where to get financial advice

There are two types of financial advisers:

  • Independent financial advisers (IFAs) – IFAs offer impartial advice about every financial product and service available across every company
  • Restricted advisers – In contrast, a restricted adviser gives financial advice on a limited selection of products. This is usually because they specialise in one specific area, such as pensions, or because they only offer advice on products from a limited number of companies. Seeking financial advice from a bank or building society would, therefore, be restricted advice, as they’d be offering biased recommendations tailored around their products and services

As such, it’s usually best to opt for an IFA to ensure you’re receiving advice on all the available options and, subsequently, make the most informed decision possible. To find an IFA in your area, we recommend using one of the following directories:

When to seek financial advice

It sounds obvious, but you should look to seek professional financial advice whenever you face a major monetary decision. Never assume your own financial knowledge is sufficient when dealing with large amounts of money or major events – after all, making an ill-informed call could have major long-term repercussions.

What to expect from your financial adviser

The role of an IFA is to offer impartial financial advice specific to your own situation and desires. As such, any financial product or service recommended should be:

  • Affordable
  • Suitable for the level of risk you’re willing to take
  • Time convenient (ie. whether you want to save for the short term or long term)

Remember, a restrictive financial adviser can only offer accurate and trustworthy advice within their qualified area, which is generally what makes IFAs more appealing than restricted advisers.

When you first meet with a financial adviser, you should be given comprehensible information detailing the following:

  • Whether the advice is independent or restricted (and, if the latter, in which way it is restricted)
  • The quality of advice offered
  • The cost of the advice offered

They will also present you with a ‘key facts’ document that outlines the following:

  • The services your chosen adviser or firm offers
  • The financial products they recommend
  • Rules surrounding changing your mind when taking out a financial product
  • How to complain if you’re not happy with the service provided
  • Your right to further information and explanations
  • Who the firm or adviser is authorised and regulated by

How much does financial advice cost?

You will be expected to pay for any financial advice you receive, as well as any potential additional fees for any financial products you buy.

Costs will vary per adviser or firm, so it’s very important to shop around for the best deal and to fully comprehend how much the advice is costing you. Advisers are no longer paid by commission, meaning charges are often calculated via:

  • An hourly rate
  • A monthly retainer
  • A predetermined fee
  • A percentage of funds invested

Precautions to take

It is vital that you confirm your financial adviser is qualified and registered. Legally, all financial advisers must have:

  • National Qualifications and Credit Framework – level 4 or above
  • A Statement of Professional Standing (SPS)

In addition to this, all advisers should be registered with the FCA to ensure that they both meet regulatory standards and that you’re protected in the event of having been given bad advice.

You can check your adviser is registered with the FCA by looking them up on the Financial Services Register, however, don’t be afraid to ask your adviser outright to prove they have the appropriate qualifications.

How to complain about a financial advisor

If you’ve lost money because of misleading or inaccurate advice, you’re more than entitled to complain – however, it is worth noting that this isn’t the case if you simply didn’t make as much money as you’d hoped to make.

Each company will have their own complaint procedure for you to follow, but if you are dissatisfied with the outcome of this, you can forward your complaint on to the Financial Ombudsman, assuming the adviser was authorised by the FCA.

All information correct at the time of publication.

The Jolly Good Loans blog is full of helpful financial tips and advice, and remember, if you’re having financial difficulty, there is help available. Head over to the Citizens Advice website or call the free national debt helpline on 0808 808 4000.