How to Choose a Financial Planner
It is important to take your time when looking for a financial planner and ensure you begin your search well ahead of any significant financial decisions you'd like advice on.
A good starting point is to find someone you're going to enjoy working with. That person should also be able to draw information from you and challenge your thought processes. A strong working relationship will be crucial in the long term as you and your adviser may need to have difficult discussions. It's essential that you're comfortable disclosing matters to your adviser that you may not even share with those closest to you.
Another key factor to consider is the level of qualifications that a financial planner has, as this shows they've taken the time to study and invest in themselves. Although technical knowledge is not needed in all circumstances, it is reassuring to know that it's there in the background. Your planner should also have a network of other professionals who can help with matters outside their areas of expertise.
You should consider the planner's business model. With some firms, you can pay for advice and products separately. Others wrap charges together, which can mean that the advice is paid for by the commissions generated. If you only want advice, you will not want your adviser to try to sell you a product, but if you only want to buy products, the reverse will be true.
It is, therefore, important to investigate the different pricing structures for receiving advice. Most advisers charge a percentage fee for new investments and an ongoing percentage of the assets under management. However, some advisers will offer a fixed fee rather than a percentage, and fewer still will use time charging. The main time-cost of a client-adviser relationship is in delivering the advice, so make sure you know what you're paying for.
Advisers have different degrees of autonomy, with the most autonomous being independent and directly regulated by the FCA. There are also independent advisers who are members of a network; network members who are restricted in the scope of advice; and, finally, vertically integrated advisers who sell products solely for one provider.
Lastly, you should ask how any investments made through your adviser will be managed. Some advisers have fund management qualifications – most do not.
In summary, if you're looking to build a long-term relationship with a financial planner, make sure you're comfortable with the person, their team, their business model, and their charges. This takes time, so give yourself plenty of it, as it will be worthwhile in the longer term.
If you have any questions you would like to discuss with LIFT-Financial's professional team of advisers, please get in touch.