10 Tips When Getting Financial Advice

1. Ask your financial adviser about the services that are available to you and the cost of each service

Financial advisers often offer different levels of service, such as transaction only, limited advice, a full financial review or ongoing reviews.

If you want ongoing reviews of your investments make sure the frequency and content of the reviews and the costs involved are clear.

2. Make notes of meetings and telephone conversations with your financial adviser

Having a record of these conversations to refer back to later will help you understand what was recommended and why. You should include details like the date, time and location of the conversation along with who was there and what was said.

This record may also be useful in the unfortunate event you have a dispute with your adviser.

3. Be realistic about your retirement or investment goals

For example, you are unlikely to be able to earn £50,000 a year from a low risk investment on £300,000 of savings. In this situation you should be prepared to consider advice to:

  • Receive less income from your savings
  • Retire later than planned
  • Put more money towards your retirement
  • Take on more risk, or
  • Some combination of the above.

Be wary if you are promised high returns with little to no apparent risk.

4. Provide full and accurate information

Your adviser cannot give suitable advice without knowing all relevant information regarding your financial situation, your goal and objectives. If you provide incomplete or inaccurate information you may receive unsuitable advice and suffer a loss and/or be unable to afford your regular outgoings as a result.

5. If you do not understand something, keep asking questions until you do

You should not worry about appearing unknowledgeable or insulting the expertise of your adviser by asking questions about anything you do not understand. It is your money and financial wellbeing that is being discussed and you need to make sure you understand.

6. Ask your adviser to explain how each product they recommend works

The purpose of every financial product is to make more money but they aim to do this in a variety of ways. It is important that you understand how the recommended product will help you reach your financial goals.

7. Do not agree to invest in any product or strategy you do not understand

Some financial products and strategies are very complex and hard to understand. If your adviser cannot explain to you, in terms you understand, how a product or strategy will make you money then you should not agree to it.

8. Make sure you understand the written advice you receive and this reflects what was explained to you

Your adviser will generally provide you with a piece of written advice which sets out: your financial situation; what is recommended and why; how any recommended products work and the risks involved in a manner that you can understand.

If you do not understand the written advice or you do not believe that it accurately reflects your adviser’s explanation, tell your adviser and ask for clarification.

9. Take the time to read any document your adviser gives you

Unless you are confident that you understand the advice you have been given, be wary of making a commitment there and then. Take any documents you are given home, read them carefully and ask your adviser to explain anything you do not understand.

You should not feel pressured to make any decisions on the spot.

10. Make sure you receive regular statements for any investment you make

If your adviser provides ongoing services, statements may be sent to your adviser who will then send these to you.

If there is anything you do not understand, query this with your adviser.