Financial planning: Get advice on putting your money to work

Setting your financial affairs in order is no easy task. Over time, you may have started up savings, investment and insurance schemes. But are these still appropriate for your needs or could your money be put to better use elsewhere? Abigail Montrose seeks advice.

Choosing the right investments can mean the difference between a mediocre and a good return on your money, while a review of your insurance and pension provisions could save you thousands of pounds over the long term.

An independent financial adviser (IFA) can review your overall financial situation and give you expert advice on making the right provisions for your financial security.

All financial advisers seek to give good advice but only IFAs can give "best advice". This is because IFAs scour the whole market, looking for the best financial products most suitable for your needs, unlike tied agents and appointed company representatives, who can only advise on and sell products from the company they work for.

Being able to choose from the whole market tends to be better than only being offered one company's products. No company will always have the best products or best performing funds in every investment sector. And few companies offer the full range of investments and savings products available on the market. With an IFA, not only do you know you are getting expert advice, but it also is unbiased. Of course, this advice does not come for free.

IFAs make their money in one of two ways. Either you can pay a fee or they can receive commission from the financial products they sell you.

IFAs working on a fee basis charge from pounds 50 an hour. The rate may vary depending on the type of advice you want. This may seem steep, but other professionals, such as accountants and solicitors, can charge more.

Alternatively, your IFA may be commission-based.You will not have to pay any money up-front for the advice you receive, but you will pay it indirectly. Many financial companies pay commission to advisers when they sell one of their products, and this is added to the cost of the financial product you buy. If your IFA is fee-based, he or she can ask for no commission to be charged or paid. Alternatively, the IFA can split the commission with you.

By law, your IFA has to tell you how much commission he or she is being paid. Commission payments vary between 1 per cent and 5 per cent of the amount you invest, depending on the product. Beware a sting in the tail: commission on some regular-premium products is based on a calculation of the premiums you are expected to pay over the lifetime of the product. This is typically an up-front payment, which means most of your first year's premiums will go in commission.

IFAs have to hold professional qualifications. The basic qualification is the Financial Planning Certificate, but some IFAs go on to take more advanced exams and will specialise in a particular area such as investments, tax planning or mortgage business.

Choosing an IFA you are happy with can take time, bearing in mind that you want to deal with someone you are comfortable with and who you can trust. Recommendations from friends, a solicitor or an accountant can be a good starting point.

"You may even find your solicitor or accountant is able to help you himself," says Anne-Marie Martin, acting chief executive of IFA Promotion (IFAP), a body which promotes financial advice.

"Some solicitors and accountants are qualified to give independent financial advice. If they are not qualified themselves, they may have an IFA arm or someone in the company who is qualified and deals specifically with financial planning."

To check if your solicitor or accountant is authorised to offer independent financial advice, you can call the Financial Services Authority central register on 0171-929 3652.

If you are unable to find an IFA via a recommendation, you can call the IFAP hotline on 0117-971 1177 for details of three IFAs in your area. IFAP recommends talking to at least a couple of IFAs before deciding which one to select. Most firms are happy to give potential clients the names of two of their clients.

When you meet an IFA, he or she should carry out an in- depth fact-find into yourfinancial arrangements. This enables them to build up an overall picture of your financial affairs. Your IFA can review your arrangements. It could be that some of your investments are no longer performing particularly well and you could do more with your money elsewhere.

IFAP has produced a guide on the types of financial advice that are available, as well as a factsheet on how your IFA is paid. For copies, contact the IFAP hotline on 0117-971 1177.

Suggested Topics
News
A 1930 image of the Karl Albrecht Spiritousen and Lebensmittel shop, Essen. The shop was opened by Karl and Theo Albrecht’s mother; the brothers later founded Aldi
people
Arts and Entertainment
Standing the test of time: Michael J Fox and Christopher Lloyd in 'Back to the Future'
filmA cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Arts and Entertainment
Flora Spencer-Longhurst as Lavinia, William Houston as Titus Andronicus and Dyfan Dwyfor as Lucius
theatreThe Shakespeare play that proved too much for more than 100 people
News
exclusivePunk icon Viv Albertine on Sid Vicious, complacent white men, and why free love led to rape
PROMOTED VIDEO
Arts and Entertainment
Stir crazy: Noel Fielding in 'Luxury Comedy 2: Tales from Painted Hawaii'
comedyAs ‘Luxury Comedy’ returns, Noel Fielding on why mainstream success scares him and what the future holds for 'The Boosh'
Life and Style
Flow chart: Karl Landsteiner discovered blood types in 1900, yet scientists have still not come up with an explanation for their existence
lifeAll of us have one. Yet even now, it’s a matter of debate what they’re for
Arts and Entertainment
'Weird Al' Yankovic, or Alfred Matthew, at the 2014 Los Angeles Film Festival Screening of
musicHis latest video is an ode to good grammar. But what do our experts think he’s missed out?
Sport
New Real Madrid signing James Rodríguez with club president Florentino Perez
sportColombian World Cup star completes £63m move to Spain
Travel
Hotel Tour d’Auvergne in Paris launches pay-what-you-want
travelIt seems fraught with financial risk, but the policy has its benefits
Arts and Entertainment
booksThe best children's books for this summer
Life and Style
News to me: family events were recorded in the personal columns
techFamily events used to be marked in the personal columns. But now Facebook has usurped that
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Programme Director - Conduct Risk - London

£850 - £950 per day: Orgtel: Programme Director - Conduct Risk - Banking - £85...

Business Analyst (Agile, SDLC, software)

£45000 - £50000 Per Annum + excellent benefits: Clearwater People Solutions Lt...

Finance Manager - Bank - Leeds - £300/day

£250 - £300 per day + competitive: Orgtel: Finance Manager - Accountant - Bank...

Compliance Officer - CF10, CF11, Compliance Oversight, AML, FX

£100000 - £120000 per annum + BONUS + BENEFITS: Harrington Starr: A leading fi...

Day In a Page

Noel Fielding's 'Luxury Comedy': A land of the outright bizarre

Noel Fielding's 'Luxury Comedy'

A land of the outright bizarre
What are the worst 'Word Crimes'?

What are the worst 'Word Crimes'?

‘Weird Al’ Yankovic's latest video is an ode to good grammar. But what do The Independent’s experts think he’s missed out?
Can Secret Cinema sell 80,000 'Back to the Future' tickets?

The worst kept secret in cinema

A cult movie event aims to immerse audiences of 80,000 in ‘Back to the Future’. But has it lost its magic?
Facebook: The new hatched, matched and dispatched

The new hatched, matched and dispatched

Family events used to be marked in the personal columns. But now Facebook has usurped the ‘Births, Deaths and Marriages’ announcements
Why do we have blood types?

Are you my type?

All of us have one but probably never wondered why. Yet even now, a century after blood types were discovered, it’s a matter of debate what they’re for
Honesty box hotels: You decide how much you pay

Honesty box hotels

Five hotels in Paris now allow guests to pay only what they think their stay was worth. It seems fraught with financial risk, but the honesty policy has its benefit
Commonwealth Games 2014: Why weight of pressure rests easy on Michael Jamieson’s shoulders

Michael Jamieson: Why weight of pressure rests easy on his shoulders

The Scottish swimmer is ready for ‘the biggest race of my life’ at the Commonwealth Games
Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

The 'scroungers’ fight back

The welfare claimants battling to alter stereotypes
Amazing video shows Nasa 'flame extinguishment experiment' in action

Fireballs in space

Amazing video shows Nasa's 'flame extinguishment experiment' in action
A Bible for billionaires

A Bible for billionaires

Find out why America's richest men are reading John Brookes
Paranoid parenting is on the rise - and our children are suffering because of it

Paranoid parenting is on the rise

And our children are suffering because of it
For sale: Island where the Magna Carta was sealed

Magna Carta Island goes on sale

Yours for a cool £4m
Phone hacking scandal special report: The slide into crime at the 'News of the World'

The hacker's tale: the slide into crime at the 'News of the World'

Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
We flinch, but there are degrees of paedophilia

We flinch, but there are degrees of paedophilia

Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
The truth about conspiracy theories is that some require considering

The truth about conspiracy theories is that some require considering

For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn