The first rule of visiting a financial adviser: 'do not ever be in awe'

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The Independent Online

With a wealth of information on the web and a library's worth of self-help books, it's becoming easier by the day for consumers to manage their own financial affairs.

But there are times when only professional help will do. Whether you're starting a family, planning for retirement or simply don't have the time to put in all the research needed, a financial adviser can help you avoid potentially expensive mistakes.

Unfortunately, finding an adviser who meets your particular needs is not always straightforward.

There are three types of adviser and it's important to know how each works in order to understand what you're getting.

Advisers in banks and building societies will usually be "tied" and sell you products - life cover, savings or investment funds, say - linked to only one company. But some banks, as well as many advisers who advertise in directories and online, are known as "multi-tied" and will pick products for you from a panel of several specially chosen providers.

Finally, independent financial advisers (IFAs) select products from across the whole market. They tend to be better qualified than their more restricted rivals, and must offer the choice to customers of paying by fee or commission.

In theory, their guidance to consumers is entirely impartial, and oblivious to the size of commission paid by the companies whose products they sell. But the industry has been tarred by mis-selling scandals - if you're wary about paying commission, then opt for an upfront fee instead.

All advisers are duty-bound to explain how they operate but it's worth checking. For example, many IFAs have switched or sold up to become multi-tied and may not make this clear.

Finding the right type of adviser is the first step. The next is to ask: how good are they?

Start with qualifications. Every adviser must pass the certificate in financial planning (or its predecessor, the financial planning certificate), which gives them a basic grounding.

More importantly, look for letters after the name that show an adviser's willingness to get to the bottom of their subject. Two of the best general IFA qualifications are the chartered financial planner, from the Personal Finance Society (PFS), and the certified financial planner from the Institute of Financial Planning (IFP).

Barely 800 of the UK's 18,000 advisers hold the "chartered" status and another 600 are "certified" - a decent indicator of those advisers who take their own education very seriously.

Tim Eadon, chief executive of the PFS, says consumers should not be shy about demanding details of qualifications.

"Advisers should have passed specialist exams to advise in many areas. If you are going to them about pensions, ask about their pensions qualifications. Customers should say, 'prove to me why I should come to you with my money'."

If you want help on transfers between different pension pots, pension consolidation or buying an annuity, look for the G60 qualification and perhaps also the K20 or CF9.

Any IFA advising on mortgages should have the MAQ or CF6, and those advising on equity release should have passed the CF7. The CF8 is the qualification to look for if you want help on long-term care.

Websites such as www. let you search for advisers in particular areas or with certain qualifications. And try the PFS ( or IFP (, which provide listings for their members.

"Do not ever be in awe of an IFA," says David Elms of marketing body IFAP. "You are paying for that advice."