What an adviser does
A financial adviser helps you make decisions about money that are hard to reverse and easy to get wrong: how to invest, how much to put into a pension and how to take it out, how to protect your family, how to pass on what you've built, and how to do all of that paying no more tax than you need to.
The work usually starts with a fact-find: a structured conversation about your circumstances, goals, existing arrangements and attitude to risk. From that the adviser produces recommendations in writing, explains them, and, if you agree, implements them. Many clients then stay with their adviser for an annual review, so that the plan keeps up with life.
What an adviser does not do is pick stocks or promise returns. Good advice is mostly about structure, tax and behaviour, and the evidence is that those are where the value lies.
Independent or restricted
Every adviser in the UK must tell you which of these they are.
- Independent advisers can recommend products from across the whole market and must consider all types of product that could meet your needs.
- Restricted advisers are limited in some way: to certain providers, certain product types, or their own firm's investment solutions. Restricted doesn't mean worse; many large wealth managers are restricted because they run their own portfolios. It does mean you should understand what the restriction is.
Which suits you depends on what you need. Someone wanting whole-of-market pension and protection advice may be best served by an independent. Someone with a larger portfolio who values an in-house investment team, tax specialists and a single point of contact may prefer a restricted wealth manager. We explain the difference when we match you.
Qualifications and regulation
To give regulated financial advice in the UK an adviser must hold at least a Level 4 qualification, such as the Diploma in Regulated Financial Planning or the Diploma for Financial Advisers, and be authorised by the Financial Conduct Authority, either directly or through their firm. Many go further: Chartered Financial Planner and Certified Financial Planner are Level 6 and 7 standards.
You can check any adviser or firm on the Financial Services Register. Because the advice is regulated, you have access to the Financial Ombudsman Service if something goes wrong, and may be covered by the Financial Services Compensation Scheme.
What it costs
Since 2013 advisers have not been allowed to take commission on investment and pension products, so fees are paid by you and must be agreed up front. The common structures are:
- A fixed fee for a piece of work, such as a pension review or a retirement plan. Often quoted in the hundreds to low thousands of pounds depending on complexity.
- A percentage of the amount invested for initial advice and implementation, commonly in the region of 1% to 3%, often tapering for larger sums.
- An ongoing fee for continuing advice and annual reviews, commonly around 0.5% to 1% a year of the assets looked after.
- An hourly rate, less common, for specific questions.
Protection products such as life cover can still pay the adviser commission from the insurer, which the adviser must disclose.
These are typical ranges, not quotes. Fees vary with the adviser, the complexity of the work and the size of what's involved. What matters is that you receive a clear written statement of the fees before you commit, and that you're comfortable with what you get for them.
The first meeting. Almost every adviser offers an initial conversation at no cost. It's for both sides to decide whether to work together. Expect to be asked about your situation and your goals, and to hear how the adviser works and what they charge. You should not be asked to sign anything.
How to find the right one
That's what we do. Tell us what you need and we'll match you with an FCA-regulated adviser whose expertise fits, send you their details to check, and arrange a complimentary consultation on Microsoft Teams at a time that suits you.
This article is general information, not financial advice. WealthWise Connect is not authorised or regulated by the FCA. Tax rules depend on individual circumstances and may change. For advice on your own situation, speak to a regulated adviser.