The do it yourself (DIY) versus employ a professional question arises in many situations from as simple as fixing a shelf in the home to submitting a tax return. The key factors in the decision making process ultimately come down to time invested, cost and risk.
Taking the shelf example, someone with a basic set of DIY skills could probably fit a shelf, saving on the cost, but in most cases it would take longer than a professional. There is a risk if the job is not performed correctly the shelf could collapse causing damage or, worse case, injury.
Finding the right financial adviser is not as simple as it may seem. Generally, a referral from someone you trust is a good starting point but is important to note that some Financial Advisers specialise in certain areas. The first step is to decide what type of advice you need, then choose accordingly. You need to check:
All financially advisers have to be qualified to the appropriate standard and are regulated by the Financial Conduct Authority (FCA). Check that their Statement of Professional Standing is up to date on the FCA website and ask about any advanced qualifications that they may have for the areas you are specifically interested in i.e. Specialist Pension Qualifications or special permissions to advise on final salary pension transfers.
Can You build a relationship
A good Independent Financial Adviser will need to build a detailed understanding of your situation and your needs so it is important you feel you can trust them and be entirely open about your situation. With a relationship established it would be a waste to regularly change adviser without good reason so it is important to establish you can work with them over the long term.
Independent or Restricted
Advisers are either independent or restricted. Independent Financial Advisers can recommend the full range of available products from the full range of potential suppliers. Restricted advisers may be either restricted in the range of products they offer, or the number of suppliers they can choose from.
Since January 2013 All financial advisers work on a fee basis, be sure to ask for details of all fees and how they will be charged. Ask about on-going advice costs and whether VAT is charged. It is important to check your financial adviser will actually perform the required work and not sub-contract to another Independent Financial Adviser firm, effectively increasing your fee.
Testimonials and Case Studies
A good adviser should have testimonials from previous clients so ask to see them. They should also have case studies relevant to your particular area of interest and these can be particularly useful when making a decision.
Ask the adviser how many complaints (if any) the firm has had upheld against them or check yourself on the FCA register.
Recording Standards & Systems
A good Independent Financial Adviser will record everything relevant in writing so you both have a record of what was discussed and what was agreed. The best Independent Financial Adviser firms will also have robust internal systems and processes both to reduce the prospect of any errors and to minimise costs. Check what systems are in place, ISO9001 certification is a good place to start.
Ultimately the decision to employ an Independent Financial Adviser (or not) comes down to a simple cost-benefit analysis. As you and your chosen Independent Financial Adviser may work together for many years to come it is important to choose wisely.