10 Questions to ask a Financial Adviser
by Amyr Rocha Lima
What do you feel is the most valuable asset of a financial adviser?
In my experience, the most invaluable asset of a financial adviser isn't their ability to offer exclusive investments, tax-mitigation strategies, or high-yield savings plans. Nor is it the patented processes or unique methods they might employ in their craft. These skills are, of course, valuable—but they are also teachable, learnable, and attainable through certifications and degrees.
Instead, the most precious asset is something both simpler and more elusive: trust. Trust forms the bedrock of every successful client-adviser relationship. When you work with an adviser you trust, you can rest assured that your needs will always be prioritised and that your financial dreams and aspirations are their main concern.
But how do you find a trustworthy financial adviser?
So, how does one go about finding a trustworthy financial adviser? It's a challenging task, indeed. Before co-founding Strategic Wealth Partners, I consulted at AXA and Metlife, advising financial advisers on investment strategy and practice management. Having met hundreds of financial advisers across the UK, I've seen the full spectrum—from the truly excellent to the distinctly mediocre.
Some advisers I met were fantastic, and I would trust them with my own parents, friends, and family.
Many, however, were not. In fact, many of these financial advisers were trained to be great salespeople but lacked the skillset required to assist their clients in a variety of financial situations.
So, today I'd like to share some wisdom to assist you in finding the best financial adviser for you and your family.
My goal is to assist you in finding someone who will treat you and your family with respect, integrity, and competence. The first step in developing a trustworthy relationship is to ask the right questions the first time you meet with a financial adviser.
I hope these questions are helpful to you.
Question 1: Who are you regulated by?
The Financial Conduct Authority (FCA) regulates all independent financial advisers in the United Kingdom.
You should always double-check the adviser you are speaking with (and their firm) on the FCA website rather than relying solely on their website or information provided by the adviser.
Using an FCA-regulated financial adviser ensures that they have been professionally evaluated and that you are protected under UK law if something goes wrong.
Question 2: What qualifications do you have and are you authorised by the FCA to provide financial advice?
Many industries are filled with designations and professional certifications, and the financial services industry is no different. Each designation can differ in both the difficulty of achieving the designation in the first place and the level of continuing education requirements that must be maintained over time.
All regulated financial advisers must have a Qualifications and Credit Framework (QCF) Level 4 or higher qualification (equivalent to the first year of a university degree). They must also submit an annual Statement of Professional Standing (SPS).
The CERTIFIED FINANCIAL PLANNER® certification is the only globally recognised mark of excellence in financial planning and is a degree level qualification.
CFP® professionals have proved their extensive theoretical and practical knowledge, and it represents a public commitment to professional standards.
Question 3: What is your fee structure?
A financial adviser has a legal duty to tell you how they charge - and how much they charge - before they start working with you. Some advisers will provide a free initial consultation, while others will not.
Some advisers bill by the hour, while others charge a flat fee or a percentage of the value of your investments. Their fee structure may vary depending on the service you require, but in any case it should be agreed upon in advance.
Remember, good financial advice is never free.
Your financial adviser should be compensated. But how they are compensated can create conflicts of interest. Choose to work with financial advisers who are only compensated directly from their clients. This reduces conflicts of interest and better aligns their interests with yours.
Question 4: What areas of financial advise do you specialise in?
Look for a financial adviser who has demonstrated knowledge, qualifications, and experience in the areas where you require assistance.
Some advisers specialise in specific areas, such as equity release and long-term care, whereas others are specialists in pensions, retirement planning, and building comprehensive financial plans that aim to address these financial needs.
Most advisers also provide ongoing services, such as regular meetings to review your financial plan and investments.
Question 5: How independent are you?
To be considered "independent", a financial adviser must offer a wide range of products and providers from across the market, as well as provide unrestricted and unbiased advice.
On the other hand, a "restricted" financial adviser is one who is only permitted to recommend specific types of investment products from a limited number of providers.
Bear in mind that if they can only recommend products from a one or a limited number, you might not get the choice you need.
Question 6: What experience do you have advising people in my particular situation?
Make sure that this is not the first time the adviser has dealt with someone in your situation.
If they are regularly working with people like you and can provide examples, that is ideal.
Remember that a financial adviser will be better placed to give you an accurate answer if they know enough about your situation and what you're looking for. So pay attention to whether they're more interested in knowing about you or your assets.
Question 7: Will you give me ongoing advice?
Some advisers provide ongoing services in addition to making one-off recommendations.
This could include an annual review to assess whether your financial plan remains on track and whether your investment portfolio is still appropriate.
An ongoing advice service should empower you to always have clarity about your financial situation and to plan for potential changes accordingly.
If you decide that an ongoing service is right for you, you should establish how you would work together with a financial adviser on an ongoing basis, and what it will cost you.
Question 8: What is your investment philosophy?
Investments are critical to your overall financial health, and therefore you should work with a financial adviser who employs investment strategies that you are comfortable with.
The key thing to look for is that the adviser has a clear, evidence-based investment strategy that can be communicated clearly.
If this is not the case, their investment strategy may be based on a hunch rather than academic research.
Question 9: How will we work together?
Before you commit to working with a financial adviser, you should understand how they interact and engage with their clients.
This is an opportunity for you to learn more about their process, systems, communication style, and overall business operations.
You can also ask the following questions:
What will be discussed at our financial planning meetings?
What steps are involved in the financial planning process?
Will you put your recommendations in writing?
How frequently will we meet?
These questions will assist you in understanding how the advisor will work with you and whether their system is appropriate for you.
Question 10: How will you communicate with me, and how often?
Communication is key in any healthy relationship.
A financial adviser should be proactive. They should provide you with regular updates on their thinking, including the most recent taxation advice, investment advice and research. They should also check in with you on a periodic basis to see if your needs have changed since the last time you met.
The appropriate level of communication will, of course, differ from person to person. It's a matter of personal preference; aim to find a happy medium.
Before you commit to hiring a financial adviser, agree on how frequently you'll communicate. At least one annual meeting should be held to review your financial situation.
Knowing what questions to ask a financial adviser during the initial meeting is critical to building a successful long-term relationship.
There are several things you should be aware of in order to ensure that your adviser is acting in your best interests and has a genuine desire to see you succeed.
A good financial adviser should have the professional competence to provide personalised financial planning and investment management advice that assists you in achieving a secure financial future.
If you’re considering working with a financial adviser, you can get started with Strategic Wealth Partners today.
We’re a company that’s built on relationships, so our financial advisers always start by understanding what's important to you. They work with you to build personalised strategies that support you throughout your financial journey, so you can achieve the future you see for yourself and the ones you love.
For a more detailed discussion on this topic, please feel free to contact us. Our team are always available to answer your questions and to help you with any of your financial planning needs. Here’s what we offer: A cup of coffee… and a second opinion.
"The trust and feeling of comfort has grown over the eight years since our first meeting."
"They are good listeners and make thoughtful recommendations that are relevant to what we are trying to accomplish in our lives."
"Working with them on my long-term financial plan has been a source of comfort since my husband's passing."
Our job is to make sure that every decision you make moves you closer to your goals.
If you've never worked with a financial planner before, we'll guide you through the process.
If you have previously worked with a financial planner but believe it is time for a change, we can assist you in making that transition.