How to find a good IFA ?

[Deleted User]

We're looking for a good IFA in our area to do some retirement planning for us - including finding an additional investment vehicle (in addition to our pensions). But how to do this?

Have a list of local IFAs. Have also asked lots of people we know - but they either don't have them, have a tied financial adviser, or don't feel able to recommend their own.

I would guess that the next step is to choose one, make an appointment and see how it goes?

My question is really - how to know if that person is knowledgeable and right for us? Should we see more than one and then choose? What sort of questions should we be asking them? What should we be looking out for?

(We're happy to do this on a commission rather than fee basis).

This is an important decision and (we hope) will be the start of a long term financial relationship. But - how to choose ??

SeniorSam

Corona wrote: »

We're looking for a good IFA in our area to do some retirement planning for us - including finding an additional investment vehicle (in addition to our pensions). But how to do this?

Have a list of local IFAs. Have also asked lots of people we know - but they either don't have them, have a tied financial adviser, or don't feel able to recommend their own.

I would guess that the next step is to choose one, make an appointment and see how it goes?

My question is really - how to know if that person is knowledgeable and right for us? Should we see more than one and then choose? What sort of questions should we be asking them? What should we be looking out for?

(We're happy to do this on a commission rather than fee basis).

This is an important decision and (we hope) will be the start of a long term financial relationship. But - how to choose ??

Hi Corona,

Wise questions that need consideration.

First of all, make sure that the adviser is an INDEPENDENT adviser, not tied or preferably not attached to banks and building societies.

From the list, call them up and find out if they will meet with you, preferably at your home, which is usually free and without obligation. Ascertain their qualifications and personal experiance, particularly in the areas that you are specifically looking at.

Most IFA's should have a reasonable knowledge of all areas of financial planning, but some specialise in certain areas, such as pensions or investments, which can be beneficial to the client.

Ask how long they have been in the industry and how many moves they have made between companies, as this can reflect how long they may be working with you if you engage them.

Check on fees or commission for work entailed and the rates of these. You should be given details of their terms and costs at the first meeting they hold with you.

No harm in asking for recommendations from existing clients, but sometimes this is difficult for advisers that have not built up many clients over the years, where some of those clients are prepared to talk to new prospective clients if asked. Also if they have been in practice for some time, they will surely know some solicitors who can vouch for them in connection with clients the solicitor has passed to them.

An IFA that is with a practice that has several advisers may be best, so that on retirtement or moving away from their present company, you will have someone else to take over in the same practice.

It is a bit of a minefield, but with a little effort, you have a good chance of finding the right one who will really look after you and care about his/her relationship with you and retaining you for many years ahead.

Just bear in mind that they need to 'apply for the job' so tho speak. You are after all empl;oying them through payment by fees or commission.

Good luck

Sam

[Deleted User]

Thanks for this very thoughtful answer Sam. Sounds like you know what you're talking about !

Could I ask for clarification of a couple of things?

You said:

"From the list, call them up and find out if they will meet with you, preferably at your home, which is usually free and without obligation. Ascertain their qualifications and personal experience, particularly in the areas that you are specifically looking at."

Why is meeting them in our home better than going to their office? (I was under the impression that it would better to have a look at the place they're working from - but maybe not ??)

Also, which particular qualifications do I need to make sure they have?

Thanks.

Corona

davidscot

You could try using unbiased.co.uk for a list of local IFAs. You can also download a voucher which gives you an hour of their time for free.
I used this recently and it was a great help, and the IFA I chose was certainly knowledgeable in the field I was asking about.

SeniorSam

Corona wrote: »

Thanks for this very thoughtful answer Sam. Sounds like you know what you're talking about !

Could I ask for clarification of a couple of things?

You said:

"From the list, call them up and find out if they will meet with you, preferably at your home, which is usually free and without obligation. Ascertain their qualifications and personal experience, particularly in the areas that you are specifically looking at."

Why is meeting them in our home better than going to their office? (I was under the impression that it would better to have a look at the place they're working from - but maybe not ??)

Also, which particular qualifications do I need to make sure they have?

Thanks.

Corona

Hi Corona,

It is not essential to meet at your home for the first meeting, but you may feel more comfortable in your own surrondings and meeting there will show a certain commitment that the IFA needs to make. After all, you will be looking for regular visits from the right person in the future.

There are qualifications of Diploma level, but some people are very good at passing exams but not so hot on the implementation and the care needed to build a solid relationship with a client.

Their offices are not as important as what they can and will do for you. Their charges, well you need to understand that you often get what you pay for but a good adviser will try to see that you get the best products at the most competitive cost.

Remember that it is not always the cheepest product that will be the best but an experiance adviser will know what to look for and more importantly, how to look after you in the right way.

The adviser should also be able to answer any questions you have and importantly, ensure that you fully understand any product that you commit to. Keep asking questions if you don't understand and if you don't get the right answers, dont buy into the product.

The last reply about the internet unbiased .co.uk was a good suggestion and will help you find local IFA's, but as I said before, make sure they have some 'mileage under their belt', experiance in the industry is paramount but an adviser that keeps moving around may have a problem gaining and retaining clients, so watch out.

Hope this helps

Sam

jem16

I would say to avoid the national salesforces when choosing an IFA - those with 0870 and 0845 numbers.

Try to find a smaller local firm where you will be able to deal with the owner/partner him/herself. That way you can build up a relationship with your IFA rather than possible seeing whoever is available.

If it's investments you are after try to find an IFA who specialises in investments rather than a jack-of-all trades who does everything and may concentrate on mortgages.

Ask lots of questions so that you know the different charging options. You could agree a fixed fee ( to avoid any bias) but then arrange to pay this fee from the commission that the IFA would get from the product - any extra commission would be rebated back to you.

Ask what strategy the IFA follows and ask to see the research. If they can't/won't show you then walk away.

As to wehere you see the IFA it probably doesn't matter. A lot of smaller IFAs work from home - the IFA was traditionally a cottage industry and a lot still operate that way.

whiteflag_3

There have been some good responses so far howver you may want to consider my points as well

Corona wrote: »

We're looking for a good IFA in our area to do some retirement planning for us - including finding an additional investment vehicle (in addition to our pensions). But how to do this?

You say you are looking to do some retiremnt planning, yet then think an IFA is the best place to look for that. An IFA will be looking to sell you a product rather than plan. Why do you think you need an additional investment vehicle? Have you done a cashflow forecast for you retirment to work out how much income you will need and analyised what you have in place will give you?

Have a list of local IFAs. Have also asked lots of people we know - but they either don't have them, have a tied financial adviser, or don't feel able to recommend their own.

I know of a number of financial planners who are tied however they do very well because they and their clients are focused on advice and service rather than the product.

My question is really - how to know if that person is knowledgeable and right for us? Should we see more than one and then choose? What sort of questions should we be asking them? What should we be looking out for?

you could google "financial planner" and see if any come up your area. Many financial planners ( 600 firms in the UK) use "truth" software developed by Prestwood (a fee based financial planning firm that has been in existence for over 30 years). They might be able to give you a list of planners in your area.

This is an important decision and (we hope) will be the start of a long term financial relationship. But - how to choose ?

see above

ps any adviser/planner whatever you choose should give you a written client service agreement outlining not just what they will do for you now but going forward as well. Even if you are sold another retirement vehicle you will need to know if you are on target etc so you will need to know how much ongoing service is going to cost.

EdInvestor

Hello Whiteflag

You haven't joined St James's Place have you?

Aegis

whiteflag wrote: »

There have been some good responses so far howver you may want to consider my points as well

You say you are looking to do some retiremnt planning, yet then think an IFA is the best place to look for that. An IFA will be looking to sell you a product rather than plan. Why do you think you need an additional investment vehicle? Have you done a cashflow forecast for you retirment to work out how much income you will need and analyised what you have in place will give you?

I know of a number of financial planners who are tied however they do very well because they and their clients are focused on advice and service rather than the product.

To the best of my knowledge, the terms "financial adviser" and "financial planner" are interchangeable here. What really matters at the end of the day is the competence of the adviser in question and the quality of the available products. Generally speaking tied advisers are likely to have a stakeholder pension available, and this might well be enough, but for comparison between providers a customer would generally be a lot better off going to a whole-of-market firm.

you could google "financial planner" and see if any come up your area. Many financial planners ( 600 firms in the UK) use "truth" software developed by Prestwood (a fee based financial planning firm that has been in existence for over 30 years). They might be able to give you a list of planners in your area.

I think unbiased.co.uk would be a better start for most people, as that only includes the whole of market firms. If bias is a concern for the OP, then a fee-basis can be chosen at any IFA firm.

My major concern with looking for financial planners is that many of the banks refer to their tied salesmen as financial planners, and that could skew the results in areas where there are fairly few smaller firms operating.

see above

ps any adviser/planner whatever you choose should give you a written client service agreement outlining not just what they will do for you now but going forward as well. Even if you are sold another retirement vehicle you will need to know if you are on target etc so you will need to know how much ongoing service is going to cost.

Absolutely true, retirement planning can't be done in a single meeting, ongoing reviews are essential to ensure that the asset allocation is still right for the age group, risk profile and long-term outlook for various sectors. Depending on whether fee-based or commission-based remuneration is agreed, this might end up being paid for through the ongoing trail commission or it might require a fee to be paid for each meeting. It's worth doing your sums in advance to see how much each option will cost if you assume a fairly conservative growth rate.

As an example, the financial planner might say that the fees will be, say, £150p/h and that the full review will take 4 hours. In that case you'd be looking at around £600 a year assuming 12 monthly reviews. If you've got a pension pot of £50000 with them, then a typical trail commission of 0.5% would make the ongoing annual cost £250, so initially cheaper than the fee basis in this case. However, if you continue to contribute and the pot grows to £150k over the years, then the trail commission route now costs £750 a year while the pure fee route still costs £600.

From what (admittedly quite little) I've seen of this area, for smaller standalone pension pots it can make quite a lot of sense to go down the commission route initially, switching to a fee-based adviser/planner when the pot gets big enough to warrant it. For larger-scale financial planning including your joint pension plans, protection needs, IHT planning and other investment advice, you'll likely find the fee-paying route to be quite efficient.

Financial Planners are interested in their clients, IFAs are interested in their clients MONEY

Sounds like you're playing the semantics game a bit there... For example, HSBC multi-tied advisers are called Financial Planners, and if you think they're interested in anything other than the client's money then you and I obviously have very different views of the financial planning world.

On top of that, IFA's often become Chartered Financial Planners while retaining the job description of IFA, so it's not even as though the industry itself distinguishes between the two titles.

SeniorSam

EdInvestor wrote: »

Hello Whiteflag

You haven't joined St James's Place have you?

EdInvestor,

Names such as St James Place, who regulary portray that they are independent and are not, should be avoided at all costs. This person needs someone to care for them long term

Sam

jem16

SeniorSam wrote: »

EdInvestor,

Names such as St James Place, who regulary portray that they are independent and are not, should be avoided at all costs. This person needs someone to care for them long term

Sam

She knows that Sam. Her response was made tongue-in-cheek to Whiteflag's comments that some financial planners who are tied do well because they "supposedly" focus on advice and not the product.

IMHO anyone who is tied has an agenda and it's not their clients.