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Financial advice guide

The financial product market can seem like a complicated maze. Whether you want to buy a house, invest for the future, plan for your retirement or protect your family with life insurance, you may be feeling a little daunted and confused about where on earth to start. A financial adviser however, can help you plan your route and lead you to the most suitable product with peace of mind.

The ins and outs of financial advice to help you know where to start:

An independent financial adviser (or an IFA) researches the whole market on your behalf, offering you unbiased, independent and impartial advice on all the different types of financial products available. They will then be able to recommend the most appropriate product for you according to your financial situation.

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An IFA will ask you detailed questions on your finances to help determine your financial goals. You'll have to provide honest and in-depth answers to questions on your financial commitments, your investments, your credit history, your debts, your state of health and your risk tolerance. They will then be able to decide what help they will be able to offer you.

Every financial adviser that gives advice should be regulated by and answerable to the Financial Services Authority (FSA). This means that if anything goes wrong you will be able to make a formal complaint.

It also means that IFAs have to provide you with reasons as to why they have recommended a certain product or taken a particular course of action.

An IFA makes his money in different ways, either through a fee payable by you; through commission paid for by the company you take a product with, or a combination of both.

Before you begin:

Ask yourself the following questions:

• Do you want advice on the whole market rather than a limited number of product providers?
• Do you want your adviser to be independent of commercial relationships that may sway the product you are recommended?
• Do you want your adviser to be qualified?

If you have answered yes to all of the questions, you should seek out help from an IFA. But before making an appointment to see one, you need to think about what you need:

• Do you need someone to recommend a mortgage, a pension, insurance or advice on where to invest your money?
• Or do you want to choose a product by yourself, but just need detailed information?

Then think about what you financial product you want:

• A mortgage to buy a home
• A pension for when you retire
• Insurance to cover you if you become ill, or to help your family if you were to die
• Somewhere to invest your money to build up a lump sum

  Take the time to find out more and research the market first by visiting Moneyfacts.co.uk

  • Mortgages
  • Savings accounts
  • Credit Cards
  • Loans
  • Current accounts
  • Life assurance
  • Personal pensions
  • Investments

  This will help you get a feel for the top products available in the current market and how they work.

  Before your meeting with an IFA, make sure you take along detailed information on:

  • Your financial circumstances - pay slips, tax code, National Insurance number
  • Details on any debts credit cards, loans,
  • Any financial products you already have; savings, investments, pensions

  Think about how you want to pay for the service. Every adviser must give you details about their charges the moment you seek advice. They should also tell you about all the services that they offer, including their fees in an initial disclosure document. This will include Key Facts on:

  • The services on offer
  • The range of products they choose from
  • Any fees you have to pay
  • Any commission they will make from you taking out the product

  The Key Facts document is very important, so make sure you are given one up front. It will help you shop around to find the most competitive, and sometimes most impartial service.

  What to avoid:

  Whilst an IFA is there to help you find the right financial product, they may try to recommend other services and products. Some of the more common ones include:

  • A solicitor
  • A life policy
  • Payment protection

  If you do feel pressured, do not sign anything! You should not be forced into signing something you are not comfortable with. If you do take out another product with your IFA, find out what the costs are as well as any commission they will receive and get it in writing.

  • Register to see if the firm or IFA is registered with them. If they are not regulated by the FSA, you won't be able to complain if something goes wrong.
  • Don't be afraid to ask questions. Ask them to explain why they have recommended you the product
  • Use Moneyfacts.co.uk to find out, research and compare products before you visit the IFA - be knowledgeable in other words!