How to choose a financial adviser

Finding someone to guide you through the investment world needn't be difficult. Former adviser Mark Hayes-Newington explains where to look

Given the number and complexity of financial products on the market, all but the most sophisticated consumers are likely to need help from a good adviser. But finding one often seems a quest doomed to end with the selection of the next Barlow Clowes. It needn't be that difficult if you follow some simple rules.

A list of financial advisers can be obtained from IFA Promotion (tel: 0117 9711177), who will give you the names of three independent financial advisers nearest to you. But first, ask your family and colleagues. There is nothing like an impartial recommendation. While past performance is no guarantee of the future, it is the only yardstick there is. Don't worry if the suggested broker isn't immediately local. Most will travel, although regular trips from Inverness to London are likely to be reflected in the cost of the service.

You might also seek some pointers from employers, accountants or your bank. But remember, some will try to persuade you of the benefits of their own service. Consider them, but look at other options.

Identify two or three advisers before applying some initial checks on the status of your selected group. First check their claims to membership of professional bodies. Don't just rely on headed paper. Phone the Personal Investment Authority and/or the other organisations and check that any registration number is correct and valid.

Always visit your financial adviser at least for your first meeting. Check the premises. They needn't be palatial, but should fit with the impression that the IFA gives. Like a bank, if the operation looks run- down there is every chance the service will be. Ask about your adviser's relevant qualifications and those of staff. Also ask what was involved in obtaining the qualification. You cannot expect a full CV but it is worth asking what experience the adviser has had.

A competent IFA should be able to explain in basic language what sort of service he or she can offer and, most important, how these services can help you. Ask whom you will be dealing with. It is no good getting on with one person at your first meeting only to be passed on to a school leaver who knows nothing.

It is important to ensure that the IFA you choose has the right tools for the job. This no longer means grey hair and 30 years worth of sales anecdotes. It means the right computers to help manage information about you and the markets.

A good IFA can rely on an enormous range of systems to deliver a better and speedier service. Client management systems are used to hold the personal and financial details an IFA is legally obliged to record. You should feel confident in giving the IFA as much information as possible.

A good computer system means an IFA can keep you in touch with important issues and market developments. Many IFAs will also offer to run your details through a "needs analysis'' system. This identifies the products best suited to your financial planning objectives. It is often best if you can go through this process in front of the computer to help you understand.

There are a number of systems that help an IFA quickly identify the best product, be it pension or investment. Some systems keep more than 35,000 pages of data covering thousands of products. Without good computer systems it is inconceivable that an IFA could keep a tab on all the options in the market.

However, don't take what's on the computer as gospel. Ask for things to be explained. The computer can only help you analyse and consider the options.

Your IFA needs to make a profit so you will be charged for the advice. It is important that the structure of any charges is made clear from the beginning. The most popular method of paying involves commission taken from the money you invest. Alternatively you can pay a defined fee.

Using these pointers, you should quickly find a suitable adviser who can offer you a long and beneficial service. But keep the relationship under review lest the level of service starts to fall away.

One final tip about making judgements about the adviser from his or her car. While an Aston Martin parked outside the office may cause some concern, a reasonable Mercedes shouldn't scare you off. It may simply mean a successful business, not clients being overcharged. Reliant Robins and Austin Allegros, however, are definitely out.

Mark Hayes-Newington, a former IFA, is marketing director of The Research Department.

Start your day with The Independent, sign up for daily news emails
election 2015The 10 best quotes of the campaign
A caravan being used as a polling station in Ford near Salisbury, during the 2010 election
election 2015The Independent's guide to get you through polling day
David Blunkett joins the Labour candidate for Redcar Anna Turley on a campaigning visit last month
voicesWhat I learnt from my years in government, by the former Home Secretary David Blunkett
Have you tried new the Independent Digital Edition apps?
Finacial products from our partners
Property search
Logos for the 'Big Six'; energy companies (top row from left) British Gas, EDF, RWE npower, (bottom row from left) SSE, E.ON and ScottishPower

Winter heating underpayment brings summer pain

One reader’s monthly direct debit charge has been increased by 62 per cent

Almost 15,000 people died last winter through living in cold homes that they couldn’t afford to heat

Social tenants locked into energy tariff for 40 years

Many Londoners who live in social housing estates are not allowed to switch because their landlord has ‘locked’ them in to buying from one supplier

Will your credit card rewards be scrapped following new EU rules on charges?

Providers are unhappy with new EU rules - but ultimately it is customers who will have to foot the bill
There remain more than a million unclaimed Premium Bond prizes worth collectively around £48m

Have you won £1m in the May Premium Bonds draw?

More than £60m was paid out to more than 2 million prizewinners this month

The 0 per cent introductory deals that credit cards offer are one of the most odious tricks

Beware credit card firms’ odious tricks

Why can’t we just have open and honest charges, without all the cross-subsiding?

The pound’s recent strength against the euro could be hit by economic uncertainty under a new government

How planning can make your travel cash go further

With the pound at a high against the euro, it pays to buy now before uncertainty post-election

Put the phone down on the coldcallers who see pension liberation as an opportunity to liberate your pension from you

Pension freedoms: How to deal with cold calls from scammers

Sean O'Grady offers advice on keeping your money safe
Switching to a better bank account is much easier than it used to be

More people are switching current accounts – but what do the figures mean?

Experts disagree about the 7% increase over the past year

The chance of getting what appears to be free money can be hugely attractive, especially to first-time buyers who can be fooled into thinking it’s extra cash to buy the essential new items they need for their dream home.

Beware the boom in cashback mortgage deals

Too many mortgages are being sold with misleading gimmicks

The firm’s revenues slumped by a third to £217 million in a disastrous 2014

Wonga results could get even worse this year, chief admits

The firm’s revenues slumped by a third to £217 million in 2014

The cost of a buildings policy has dropped by 10.1 per cent over the year, with the cost of a contents policy falling by 8.2 per cent

Simon Read: Mild winter cuts the cost of home insurance

The average quote for a buildings and contents policy has fallen by 3.6 per cent

Don't count your retirement money yet: employers will stop receiving a pension rebate next year and their staff may lose out

Defined-benefit pension schemes: Rebate change in 2016 may leave you out of pocket

Employees in defined-benefit schemes are held up as the lucky ones, but the state pension scheme will be overhauled in April 2016
Labour will raise the national minimum wage to more than £8 an hour by October 2019 (EPA)

Barclays new Blue Rewards hands cash to customers. What’s the catch?

Joining Barclays Blue Rewards costs £3 a month but then lets customers in for handouts of up to £15 a month

New research reveals that despite the recovering economy, four out of five low-income households have seen no sign of their financial situation improving

Hard-up families could be eligible for financial help

A charity is urging anyone struggling financially to see if they could get help from the state

When is the best time to buy foreign currency?

Video: With an election looming, a hung parliament could hit sterling

  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Editor-in-chief - Financial Services - City, London

    £60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

    Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

    £25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

    Guru Careers: Management Accountant

    £27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

    Guru Careers: Project Manager / Business Analyst

    £40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

    Day In a Page

    General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

    'We will not sit down with Nicola Sturgeon'

    In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
    VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

    How ordinary Britons celebrated VE Day

    Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
    They came in with William Caxton's printing press, but typefaces still matter in the digital age

    Typefaces still matter in the digital age

    A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
    Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

    'Missing link' between Earth's two life-forms found

    New microbial species tells us something about our dark past, say scientists
    The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

    Pan Am Experience: A 'flight' back to the 70s

    Tim Walker checks in and checks out a four-hour journey with a difference
    Humans aren't alone in indulging in politics - it's everywhere in the animal world

    Humans aren't alone in indulging in politics

    Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
    Crisp sales are in decline - but this tasty trivia might tempt back the turncoats

    Crisp sales are in decline

    As a nation we're filling up on popcorn and pitta chips and forsaking their potato-based predecessors
    Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

    Ronald McDonald the muse

    A new wave of artists is taking inspiration from the fast food chain
    13 best picnic blankets

    13 best picnic blankets

    Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
    Barcelona 3 Bayern Munich 0 player ratings: Lionel Messi scores twice - but does he score highest in our ratings?

    Barcelona vs Bayern Munich player ratings

    Lionel Messi scores twice - but does he score highest in our ratings?
    Martin Guptill: Explosive New Zealand batsman who sets the range for Kiwis' big guns

    Explosive batsman who sets the range for Kiwis' big guns

    Martin Guptill has smashed early runs for Derbyshire and tells Richard Edwards to expect more from the 'freakish' Brendon McCullum and his buoyant team during their tour of England
    General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

    Miliband's unlikely journey from hapless geek to heart-throb

    He was meant to be Labour's biggest handicap - but has become almost an asset
    General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

    On the margins

    From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
    Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

    'This is the battle of young Egypt for the future of our country'

    Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
    Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

    Why patients must rely less on doctors

    Improving our own health is the 'blockbuster drug of the century'