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By asking someone with the exact same financial circumstances as you, who used the adviser over the next twenty years, how they got on. Unfortunately it will take twenty years to get the answer.
You could ask for references from previous clients who had the same goals as you. But how do you know that those clients, who you don't know, know how to distinguish a good adviser from a bad one and would know whether the results were good or bad given the circumstances, economic conditions and tax law of the time (which will likely differ from the ones you face over the next decade or two) and whether the result was luck or judgment? You may need to interview a thousand happy (and unhappy) customers before you get a statistically useful sample of "results".
Originally posted by bowlhead99
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Whilst you make valid points, some assessment can be made. I dealt with an IFA a few years ago (he was employed to handle workplace pensions in the company I worked for) and he was clearly touting for more work. He released confidential information of many people, and would not listen to me when I described my attitude to risk, and my investment goals, and tried to impose his views which oddly enough involved a large role for him. I am sure you agree that I could reach an assessment of him, even though I have no idea if technically he was any good. Interpersonal skills, and client privacy, are surely worth rating? Yes, as you say, you cannot rate long term performance easily, but you can probably work out if he appeared to do a decent job, if he appeared to consider all options, and so on. That does require some knowledge of what an IFA should do of course.
I once had a visit from a chap to assess the installation of a woodburner. He gave me the creeps from the word go. Again, interpersonal skills were important. I had a visit from another company. The chap was pleasant. I spoke to several staff many times in the shop, lovely people. Guess who I went with? And they did a good job, I do think you can - to some degree at least - sniff out conscientiousness and competence.
And at the end of the day, if you like the chap/lass, then it makes it easier to pay the fees does it not? An honest sum for an honest job?