Is my initial meeting free?
Many companies offer a free initial meeting, which enables the adviser to ascertain what areas of advice you require and a follow up letter will detail the areas which the adviser thinks should be reviewed. An agreed charging structure can be agreed prior to any other work being undertaken.
How will you be remunerated?
Until recently your adviser could have been remunerated by payment of commission or by a fee agreed with the specific product provider. Since 31 December 2012 the way in which advisers can be paid has changed, to ensure that the adviser is paid based on an agreed charge that the client can see in clear terms. This may mean paying the adviser directly or if a recommended product is involved, allowing the product provider to pass the agreed charge to the adviser for the work done. This moves the role of the financial adviser more in line with other professionals like solicitors and accountants.
What areas do you specialise in?
Some advisers specialise in different areas of financial planning. Some may be pension specialists or tax planning experts. The client must ensure that their adviser is capable of providing them with the advice they require. A holistic planning approach may be required if the client is looking for a full financial review.
Do you provide investment advice as well?
Some financial advisers will also provide clients with investment advice. This means that they will provide the client with financial planning advice on the required investment or pension product. Following this they may also advise the client what funds the monies should be invested in. This will ensure that the monies are invested in a fund suited to the clients risk profile and investment objectives. Other advisers use specialised investment managers to provide investment advice. If the adviser is giving investment advice the client must ensure that they are qualified to do so.
How often do we meet?
After the initial meeting the client and adviser should agree on an ongoing strategy for reviewing the advice given. This generally requires an annual review at which time the adviser will obtain up to date information from the client. The adviser will use this information to ensure that the advice previously given is still suitable for the client and that any changes in the clients circumstances will be taken into account for future advice. At this stage, the adviser should also provide correct contact details. If wanting to contact the adviser more regularly than once a year, it may be more suitable to speak to an assistant or to agree a regular date of contact to avoid any undue delays.
How long have you been in your current role and what qualifications to do you have?
Finding out how long an adviser has been in their role, will give the client an idea of how often the adviser changes roles and how well they know the company they are currently employed with. Also it is important to note, that the exams taken by Financial Advisers have changed recently and many advisers have found that they are required to undertake additional learning to keep their qualified status.
At what levels do you consider using Discretionary Fund Management?
Some investment managers will set a minimum level of funds which can be discretionary managed, due to the level of risk and charges involved. It is important to ask what level your adviser thinks is suitable for Discretionary Management.
How do you assess risk?
The advice given to clients should be suited to their aims and objectives, whilst taking into account their personal risk profile. Ask your adviser how they quantify your risk profile.
How do you keep your clients informed of legislative changes?
The financial planning world is constantly changing with rules and regulations altering regularly. It depends on the agreed relationship between adviser and client whether the adviser will continue to keep a client updated on changes in regulation or legislation. This should be agreed at the outset.
Will you review all products in the market place?
Some advisers are able to provide advice on the financial products offered by all the companies in the marketplace, whilst others are restricted to products offered by a selected number of companies. Being restricted does not mean that the quality of advice provided should be any different, just the range of products they can offer.
Financial Planning, Edinburgh