Frequently Asked Questions

I see adverts for Financial Advisors and Financial Planners, what is the difference?

Whilst there is most definitely an overlap between the roles of a financial planner and a financial adviser, they do have important differences that you should familiarise yourself with before you engage their services. Both financial planners and financial advisors will assess your current financial situation in order to put together recommendations to improve that situation.

A financial adviser has the primary ambition of helping you to manage your money including:

  • Investment management
  • Estate planning
  • Retirement planning
  • Insurance
  • Debt repayment
  • Tax planning

Financial planners however are one type of adviser who specialises in creating a plan to help companies and individuals achieve their long term financial goals and can include entities such as:

  • Retirement planning
  • Education funding planning

It is important to note that whilst a financial adviser will possess qualifications and credentials to help them achieve their purpose, just about anyone can call themselves a financial planner without possession of any qualifications.

If I choose a local based IFA, what is it they will do?

The primary role of a financial adviser is to assist individuals in achieving their long term and short term financial goals. In order to accomplish this, financial advisors will meet with clients to assess their financial needs and work alongside economic trends, regulatory changes and the clients wishes in order to help them with investments, tax laws and insurance decisions.

Some of the typical tasks undertaken by a financial adviser can include the following:

  • Recommend investments, select investments, and research investment opportunities.
  • Provide clients with tax advice.
  • Assist clients with insurance decisions and select the best products available.
  • Help clients prepare for specific circumstances such as education expenses or retirement.
  • Monitor client accounts and make appropriate changes to improve account performance.

How much should you pay a financial adviser?

There are many variables as to how much a financial adviser will charge you including the specific advice you are after and the billing structure. Some of the different ways that you can expect to be billed for the services of a financial adviser include:

  • An hourly rate, which in the UK will average at around £150 an hour although you can expect to be charged anywhere from between £75 to £350.
  • A set fee. This can be the case should you wish to engage the skills of a financial adviser for a specific job.

A monthly fee is often agreed for ongoing financial advice such as managing investment portfolios. This can be done in one of two ways, either via a percentage of the amount of money you are investing with them or alternatively as a flat fee.

There are many elements that will affect the fees that you are charged for financial advice, including the level of qualifications that the adviser is in possession of, the location of the adviser, the complexity of your situation, and how the service is delivered.

Many financial advisors will offer a free consultation in order to discuss their expertise and the fees. This is a great way to establish whether they are the right service for your needs.

What is the difference between an independent financial adviser and a financial adviser?

A financial adviser, sometimes referred to as a restricted adviser, can only give advice on a limited number of products such as insurance, mortgages and pensions, so while they may be in a position to provide good advice, they don’t always have access to the best products to suit your unique circumstances.

Conversely, an independent financial adviser has access to the entire financial market and can therefore match the best product for your situation. An independent financial adviser has extensive knowledge of all financial areas including investments, savings, insurance, pensions, tax planning and family estate management and should be registered with the Financial Conduct Authority in order to ensure ethical practice in line with your best interests.

What does IFA stand for?

Simply put, IFA stands for independent financial adviser. An IFA can take the time and guesswork out of maximising your current income, preparing for retirement, wealth management, and ensuring your family are provided for in the event of your death

How do I choose a financial advisor?

Commission driven products such as payment protection insurance have changed the way that financial advice is regulated in England. Tougher standards have been introduced banning commission driven sales and requiring advisers to hold higher levels of qualifications. However, there is still a variation in the quality of advice you can receive and you should be wary about simply employing the assistance of the first investment advisor you come across.

Firstly, you should ascertain what your requirements are so you don’t get drawn into paying for a full service that you don’t actually need. The most common areas of financial planning are usually paying off debts, building savings, mortgage advice, pension schemes and employer protection benefits.

If you are facing a big decision that requires a fair bit of cash, then you could certainly benefit from the advice of a professional. Decide if you need one off advice or if you would benefit from an ongoing service.

It is also prudent to determine if you would like face to face advice, in which case you will need to employ the support of a company with offices on the Isle of Wight. Face to face advice can help build a trusting relationship with your advisor should you require ongoing support.

Whilst an independent financial adviser may initially incur a greater cost for their expertise, they can offer you any products from across the market rather than being limited to expensive or poor performing products that benefit the advisor financially. Bare this in mind when you are deciding whether to employ an independent financial advisor or a restricted financial advisor.

The last thing to take into consideration are the fees charged. You may need to meet with a few advisers to discuss their payment structure and find an arrangement that suits you and your individual requirements.

What is an independent financial adviser?

There are several products and services available on the financial market that you will require over your lifetime including insurance policies, mortgage advice, pension plans and banks. Whilst it is common for people to go direct to source without advice, you will generally only be able to purchase the products and financial services from that single source and they may not be the best available to suit your individual requirements.

An independent financial adviser has access to the whole of the market and can use their training and expertise to identify and offer to you the best product or investment to match your personal circumstances or business. In this way they can help you realise your financial goals and aspirations

How do I find a good IFA?

A good place to start is to seek a personal recommendation for an IFA. An IFA’s success with another client will speak volumes about their level of service.

Alternatively, you can find details of trusted IFA’s using our reviews, or by speaking directly with Peter and the team by filling in your details