Assuming, then, that you do want to pursue professional financial advice, how do you go about finding the right person to work with?
Advice vs Planning
I think it’s worth reiterating that there is a difference between financial advice and financial planning. Advice is more product-oriented. It seeks to fix problems with financial products. Those products either earn the adviser a commission, or they will charge you a fee for arranging them. The products really are the end goal of the whole process.
Planning, on the other hand, uses products merely as tools, and only when needed. You’ll pay decent money for solid financial planning. For what it’s worth, my own charges are a minimum of £2,995 plus VAT for the planning process, and any implementation fees are on top of that.
But any competent financial planner should justify that many times over with the way they help you plan through the minefield of the tax and personal finance system. Planning should also help you to articulate your goals and to determine what is really important. Here’s a hint: it’s almost never about the money itself but what the money can help you achieve.
To simplify the difference, if you go to a financial adviser and tell them you have £250k to invest, they’ll start talking about their model portfolios and the platform they use. Tell a financial planner that you have £250k to invest, and if they’re any good, they should simply ask you ‘why?’
Finding a Financial Planner
So how do you find a good financial planner? That’s not so easy because, as ever, the term financial planner isn’t protected. It can in fact be used by any qualified adviser, whether or not they know one end of a financial plan from the other. My wonderful industry seems to delight in finding ways to confuse its clients.
The first place to start is to ask people you trust. It helps if you ask people in similar financial situation or time of life to you, but you may not know their situation. Most of us don’t discuss the value of our SIPPs over a pint. After that, you could ask in an online community such as the MeaningfulMoney Facebook group who they might recommend.
If you draw a blank there, then there are some sourcing systems you could try. The main ones are Unbiased.co.uk and VouchedFor.com. You should know that advisers can buy the top slots on those sites.
I know that’s fairly normal behaviour with internet advertising, but it will obviously skew things – so be aware. Adviserbook.co.uk is different as it is currently free for advisers and hence there’s no bias in the way it presents results.
As a minimum standard, I’d be looking for Chartered Financial Planning firms or Accredited Financial Planning Firms – those are official designations and can’t be used by just anybody. While qualifications do not necessarily a good adviser make, it does show willingness to better themselves and keep learning more than the minimum.
Check that the adviser themselves has a decent level of qualification – Chartered and Accredited are company designations, not necessarily about the adviser. Chartered is the standard, really, and Certified is more exacting.
Don’t settle for the first adviser you come across. Meet with two or three. Yes, I know it’s time out of your life, but this is a big decision. The person you’re interviewing will be given incredible levels of access, not only to the kind of information you don’t talk to your closest family about, but also will help you to articulate and get excited about your goals.
