How to Choose a Financial Adviser

Learn what qualifications a financial adviser must have and what questions you should ask of one.

Daniel Liberto Published on 09 December 2020. Last updated on 20 January 2021.


Deciding what you want in life can be easy. Figuring out how to get there might not be. If you aren’t sure how much you need to be saving or where you need to be investing to achieve your goals, it might be worth consulting a financial adviser.

What is a financial adviser?

A financial adviser is a professional tasked with helping people get their finances in order and put in place the plans they need to achieve their financial goals. They are qualified to provide recommendations on complex products and assist clients in a range of different areas, including pensions and retirement, investing and tax.

Independent financial adviser vs. restricted adviser

In the UK, financial advisers belong to one of two categories:

  • Independent financial advisers (IFAs) give unbiased advice and scour the entire market to find the best products for you.
  • Restricted advisers will only be able to recommend only certain products or providers. For example, and advisor who works for a bank, can only recommend products from that bank.

The constraints associated with restricted advisers immediately could make IFAs the more appealing option. While there’s a valid argument that clients with a specific need might benefit from an adviser who focuses on that specific area, the same cannot be said of those capable of endorsing only a handful of products.

Minimum qualifications for a financial adviser

Financial advisers of all stripes are subject to the following minimum requirements.

  • Level four of the Qualifications and Credit Framework (QCF).
  • Statement of Professional Standing (SPS): An annually renewable document proving they’ve signed up to a code of ethics and have completed at least 35 hours of professional training each year.

Advisers should also be registered with the Financial Conduct Authority (FCA). A thumbs up from the regulator means clients who feel they’ve been misadvised can get their case looked into by the Financial Ombudsman Service (FOS) and potentially be awarded compensation.

You can check whether an adviser is fully authorised via the Financial Services Register.

Do I need a financial adviser?

Take an honest look at what you’re trying to achieve and then ask yourself if you have the confidence, expertise and time to handle it alone. If the answer is no, consider getting help from a qualified financial adviser. Yes, it comes at a cost, but if those costs help you to save and grow your money in the long run it may be worth it.

How much do financial advisers charge?

During the introductory meeting, which is usually free, the adviser must explain how much his or her services cost. Prices vary and clients are generally charged in one of three ways:

  • A one-off fee for each job.
  • An hourly rate
  • A percentage of the money being managed, advised on and invested.

According to Unbiased.co.uk, the average cost for advice and the setting up of a £10,000 investment ISA would be £300.

Think carefully about which method works best for you and be sure to ask questions if there’s something you don’t understand — especially if it looks fishy.

How to find the best financial adviser

A good starting point is to ask family and friends if they recommend anybody. Organisations such as Unbiased.co.uk and VouchedFor.co.uk list qualified advisers and offer the ability to search for one based on region, payment options and the type of advice desired. The latter provides verified customer reviews, too, which can come in handy.

It’s generally advisable to draw up a shortlist of at least three advisers. Give each of them a call or, better yet, meet them each in person for free, before making a decision.

Questions to ask a financial adviser

Selecting an adviser is a big deal. You’re entrusting this person with your financial wellbeing and you’ll need to discuss personal matters with them, so it’s important to ask lots of questions in the opening stages. Don’t be shy, fire away and remember: a good adviser should take a keen interest in his or her clients and refrain from answering in jargon. It’s vital that you are comfortable talking to them and that they answer your questions in a way that you understand.

Some questions to ask include:

  • Independent or restricted? If it’s the latter, be sure to ask what that entails.
  • What qualifications do you have? Does the adviser hold any relevant additional qualifications?
  • Do you specialise in a particular area? Make sure the adviser is capable of addressing your specific needs.
  • Will you be the only person advising me? Often advisers will collaborate with their colleagues, hopefully assigning each project to the person best qualified.
  • What do you charge? Be clear on the fees, and whether they cover ongoing advice and reviews.
  • How often will you reassess my situation? If you enlist an adviser to manage your money, you’ll want to know how frequently they plan to monitor their recommendations.
  • Can I have that in writing? Request a hard copy of any recommendations as proof of your agreement and evidence should anything go wrong.

WARNING: We cannot tell you if any form of investing is right for you. Depending on your choice of investment your capital can be at risk and you may get back less than originally paid in

About the author:

Daniel is a freelance finance journalist. He has written and edited news, deeper analysis features, and opinion pieces for the Financial Times, Investopedia and the Investors Chronicle. Read more

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