16 questions to ask your financial adviser
When you make the decision to seek financial advice, it is vitally important you find a professional you are comfortable with; you will, after all, be giving them access to your entire financial situation and trusting them to make the very most of your money.
You can search for financial advisers in your area by clicking the button below, but once you've found one that appears to suit your needs, what next? When attempting to forge that perfect financial relationship, what should you be looking for, and what questions should you ask?
1) How, and how much, do you charge clients?
When considering whether or not to take financial advice, it is likely that one of the first questions to pop into your head will in relation to fees. A financial adviser must tell you how much they charge before you are taken on as a client. While it may not be possible to give an exact figure – many financial advisers charge a percentage of the value of your pension pot, for example – they will be able to calculate a rough estimate, or at the very least inform you of how they determine their fee.
2) Do you have experience of a situation similar to my own?
It is not uncommon for an adviser to deal only with clients that have a certain level of wealth. If you have £20,000 in savings but the adviser generally deals with people who have £500,000, then you may be better off with someone else who has more experience assisting people in a similar financial situation to you.
3) What services do you provide?
An adviser must be clear with regard to what services they offer. An independent financial adviser will generally be able to assist with preparing for retirement, building a pension pot, investments, and inheritance planning, though some may specialise in particular areas but not in others. Ensure the adviser will be adept at dealing with your scenario.
4) Will I work solely with you, or with a team?
Many financial advisers will work with you personally and will remain your point of contact throughout your association. However, advisers who work for large organisations may sometimes get a colleague or assistant to deal with some of their work. It is not only important to understand what to expect, but also to establish what sort of relationship suits you.
5) How often, and via what medium, will you communicate?
Usually a financial adviser will communicate in a way that best suits the client, but it is always worth asking just to be sure. Being aware of how often meetings will take place means you can prepare any questions you may have, and also ensures you are kept up to date on the state of your finances.
6) Whose responsibility is it to ensure regular contact is made?
Who will be organising meetings, or ensuring that email/phone contact is made on a regular basis?
7) How do you deal with someone who has more than one financial objective?
An experienced adviser will listen to a client and help them to assess and define their key financial goals. They will be able to provide a tailored strategy that stands the best chance of achieving the targets once they have been established.
8) What is, generally speaking, your approach to investment?
Does the adviser have a number of different investment strategies depending on the client’s willingness to expose their money to risk? The answer to this will almost certainly be ‘yes’, but it is still worth discussing the adviser’s methods and expertise to better understand the process, the risk involved and the potential outcomes. The more you understand about what is happening with your money, the better.
9) How regularly will you assess my financial situation and provide a progress summary?
It is essential to stay on top of your investments and understand what is working and, perhaps more importantly, what isn’t. The more regularly you assess your situation, the smaller the chance of losing money through poor investment.
10) Can I see an example of a financial plan?
The layout, structure and content of a financial plan will vary from adviser to adviser, so there is no one-size-fits-all document. Some advisers may provide a brief overview, while another could produce an extensive piece of work complete with graphs, charts and all manner of technical lingo. By seeing a sample document you will be able to get a broader understanding of how the adviser works, and you will also be able to see what you do/don’t understand about the process.
11) What happens to my money if something happens to you?
Although slightly gloomy, this is, quite rightly, a concern for many people. If your financial adviser becomes ill and is forced to take time off work, for example, will there be somebody ready to step into the breach? For peace of mind, if nothing else, it is important to know what will happen to your money should an unexpected event occur.
12) Do you have any clients that would be willing to speak about their experiences?
You can see a range of client reviews on VouchedFor.co.uk, but if it is possible to speak directly to a former/current client then it may be something worth doing, if only to better understand what your experience is likely to be further down the line.
13) How can I keep track of my money?
Some advisers are strong advocates of using technology to help clients keep track of their finances whenever they please, while others prefer to utilise more traditional methods, such as phone calls or face-to-face meetings. All methods have their benefits, but if you would prefer to keep track of investments on your laptop rather than travelling to meet your adviser, then it is worth checking if that is something they can accommodate.
14) What is your performance record?
Try not to feel awkward when trying to ascertain the adviser’s successes with previous clients. The primary reason for visiting a financial adviser is to make your money go further, after all, so it makes sense to evaluate their past performance. You can read client reviews on VouchedFor.co.uk.
15) What should I expect from our first meeting, and is there anything I should bring with me?
Generally your first consultation will be free. During this initial meeting you will usually discuss your financial goals, and the adviser will outline how they will be able to assist you. You may want to ask some of the questions listed here over the phone or via an email prior to the meeting, or you may prefer to wait for a face-to-face meeting. If you are unsure about exactly what you want to glean from such a meeting, or would like a second opinion, it is often worth taking a relative or friend along.
16) Why do you think you will be a good adviser for me?
Ultimately, you want to work with someone that fills you with confidence and whose knowledge, skill and advice you trust to be both accurate and in your best interests. A financial adviser should be able to list their key attributes and state why they are someone you can rely on.