With simple products such as car or home insurance, you really just need to ring around for a few quotes to work out what the best deal is. But before you buy anything more complicated over the phone, you should sit back and take a long look at your financial affairs.
You need to decide what your aims and priorities are. You might want to save for the future, but will you need to get your hands on the money in a hurry? You might fancy an investment in a unit trust, but perhaps you should put it in a personal equity plan. Even if you have a very clear objective, such as saving a lump sum for school fees, there are all sorts of ways of getting there.
If you don't feel that you can work those questions out for yourself, you should go and see an independent financial adviser. They are obliged by law to make themselves fully aware of your financial circumstances before they advise you to do anything.
If you phone up one of the companies offering financial services direct over the phone, you might not get any advice at all. If you want to take out a pension, for example, you can ask as many questions as you like about how it works, how much money you might get back and what happens if you miss payments.
But if you ask questions such as whether the pension would be suitable for you, or what level of contribution you should make, you are entering different territory. An answer to that sort of question would constitute "client specific" advice under the Financial Services Act. The pension provider would have to carry out a full "fact find" so that they know about your financial circumstances before answering.
Some direct pension providers will do that over the phone, while others will refer you to a financial adviser instead.
It is important to realise that if you are making the call after seeing an advertisement for a product, it will be assumed that you have already decided that the product is suitable. When you make your call, you might feel that you have been given advice and are protected by the Financial Services Act. But that is not always the case.
Make sure you know whether you have been given advice or not. And if you feel that you do need advice, or more time to think, don't hesitate to asknReuse content