HomeMoneyManaging your Money

Financial advisers: what are they and what do they do?

3 min read

Financial advisers: what are they and what do they do?
It can be challenging to manage your finances, especially considering the jargon and the various ways of saving, budgeting, and investing. So, it can be hard to know how best to plan for your future.  
A financial adviser can be handy, as they can help you manage your money and meet your money goals.
This article explores what a financial adviser is and how they can help you.  

What is a financial adviser?

Financial advisers are experts who are experienced and knowledgeable in managing money.
As they are well-qualified, they can support you with various things, such as optimising your pensions and investment strategies.
Many advisers can offer impartial advice on various topics, although some can only advise you on a select number of products and services.
This is what separates independent financial advisers (IFAs) and restricted advisers.  
While an IFA can recommend services and products from a wide range of providers, the latter can only offer services from a limited range.
A restricted adviser should always explain why this is, so you’re always getting personalised advice.   
Depending on the type of adviser you opt for, they may offer an advised or non-advised sale.
An advised sale is when an adviser lists a policy, explains it, and why it is the best option, while a non-advised sale is when an adviser outlines a policy but leaves it up to you to decide.  

What services can a financial adviser offer?

When it comes to big events such as retirement and buying a home, it’s hard to know how to plan and how these changes will impact your finances.
It’s a good idea to speak to an adviser if you need guidance on pensions and pension transfers, annuities, mortgages, tax and estate planning, investing, saving, and budgeting.
Financial advisers can do more than simply find and recommend policies and plans – they can also share what you must know about managing your money.
With the right adviser, you can understand the more complex aspects of your finances.   

How much does it cost to use a financial adviser?

Financial advisers charge for their services in one of three ways: an hourly, flat or commission-based fee.  
Your first meeting is usually free. This is where you and your adviser will ask each other questions, and they can discover how they can help.
If you decide to use the adviser, this is when you agree on the fee.
If an adviser charges an hourly fee, ask for a breakdown of the work done and how long it took.
Advisers who charge a flat fee usually do so to help with a one-time project, such as consolidating your pensions.  
An adviser may alternatively charge a percentage-based fee, usually based on a percentage of the money you need advice on.  

When do I legally need a financial adviser?

Using a financial adviser is not usually a legal requirement, but it’s worth considering when making big decisions that will impact your financial future.  
After dedicating a lot of time to saving and managing your money, the last thing you want is to be impacted by taxes and fees that might affect your plans.

What questions should I consider when seeking financial advice?

It’s worth asking yourself a few questions before seeking financial advice.
Am I planning for a specific goal? Whether planning your retirement or considering buying a home, deciding on a goal can help you focus.
How much risk am I willing to take? For example, when investing, it’s important to determine how much risk you are willing to take.
Am I looking for advice or information? While some advisers will offer you both, not all will. You should ask any prospective adviser about how they can help. 
Am I looking for one-off advice or ongoing support? Many financial advisers work with clients over a long period, but this can be expensive.  

What can I do if I’m unhappy with the advice?

If you aren’t happy with your financial advice, gather documents showing how you were misadvised and write to your adviser’s firm.  
If you’re unhappy with the response, contact the Financial Ombudsman Service for free, which may be able to offer a resolution.

How can I find the right adviser?

It can be tricky to find the right adviser. While many will be happy to advise you on a wide range of topics, some have specialisms that may not suit your needs.
Before deciding on an adviser, find out their areas of expertise and if they align with your goals.  
While you can independently seek an adviser, you can also use Unbiased to find the right adviser for your unique circumstances who will help you reach your financial goals.
Image of a banner promoting Unbiased financial advice
Banner image source: Unsplash+