We can always do our own research to get at the facts, of course. It may require a long sabbatical - and a lot of background reading. Interested? Let's face it, most of us have better things to do.
For comprehensive planning, financial advisers can help negotiate the minefield. They have the resources and expertise to know which products are around and, for those that are independent, have a legal requirement to recommend the most suitable product for you.
The problem is that all too often choosing the right adviser can seem even more daunting than picking one's way through the financial maze itself.
There is a range of choices:
r A tied agent who could be a representative of a bank or insurer, can only sell you products from one company.
r An independent adviser (IFA) can offer you a product from any company. They must have professional qualifications and are regulated by the Personal Investment Authority (PIA) .
r Financial planners are good if you need a complete review of your financial circumstances.
r Solicitors and accountants may also be authorised to give financial advice.
How do you find a reputable adviser who is not going to sell you ostriches? Garry Heath, chairman of the IFA Association, a trade body for financial advisers, recommends talking to your friends. "There are 9 million clients of IFAs out there," he says.
If you cannot get a personal recommendation the following phone services will help you track one down:
r IFA Promotion on 0117 971 1177 gives you addresses of three IFAs in your area.
r Money Management magazine has a list of fee-based advisers. (Call 0117 976 9444 for list of six nearest to you.)
r If your financial affairs are complex or you have a high net worth, the Institute of Financial Planning has a register of members available by calling 0117 930 4434.
r The Solicitors for Independent Financial Advice helpline on 01372 721172.
It pays to make some checks before parting with money. A financial adviser must be authorised by his or her relevant watchdog. For IFAs this is the PIA; for solicitors it is the Law Society and for accountants it is the Institute of Chartered Accountants. You can call these organisations, or the Securities and Investments Board, the overall regulator, on 0171 929 3652 to make sure your adviser is bona fide.
How qualified is the adviser? By the end of June, all advisers must have a benchmark qualification. This is usually the Financial Planning Certificate (FPC), set at three levels. The exams are set and marked by the Chartered Insurance Institute (CII). A range of alternative qualifications are allowed. If in doubt, contact the PIA on 0171 538 8860.
Qualifications are a useful way of telling what the overall knowledge is of the adviser concerned. But they do not convey the IFA's ability to put that knowledge to use in a creative way on your behalf.
Many lone IFAs and firms have the backing of a large IFA network, which helps them with research into products and helps with compliance issues. However, simply belonging to one of these networks is no guarantee.
Amanda Davidson, a partner at Holden Meehan, a London firm of IFAs, suggests asking plenty of questions at the first meeting. How long has the firm been in business? Is it qualified? Does it have areas of specialism? If the adviser is a sole trader, is there any back-up? Ask them to give you two clients as referees.
Be prepared to walk away: "You may just not feel comfortable with them, and want to move on," she adds.
One potentially embarrassing question concerns the adviser's remuneration. Given that the whole purpose of going to an IFA is to talk about money, this is not a sensible approach. Essentially, advisers are paid either on a straightforward fee system or they earn commission.
Financial advisers must now tell you the commission they would earn from that sale. This is so clients do not feel the advice is biased either way.
IFAs working on a fee-only basis might charge pounds 100-pounds 150 an hour in central London and pounds 50-pounds 100 in the provinces. One can usually agree a complete fee in advance. They will then rebate any commission back to you.Reuse content