Page last updated at 22:37 GMT, Tuesday, 31 March 2009 23:37 UK

Where to get financial advice

Money Talk
By David Elms
Financial advice website, Unbiased.co.uk

David Elms
David Elms

Never has there been a more appropriate time to review your finances to check they are on track.

As the recession continues to bite, your financial well-being is an imperative aspect of nearly everything you do.

You may have concerns about several aspects of your personal finances, whether it is your pension, investments, savings or your mortgage, to name just a few.

And as the financial world grows ever more confusing, now is the time to seek advice.

No matter what financial situation you may be looking into, the most suitable product for you is almost certainly out there.

However, without clear and professional guidance, trying to do this on your own can be a minefield - especially in the current climate.

Taking the time to do some initial planning and seek advice can prove invaluable in making the right choice for your individual circumstances.

How do I know whether I need advice?

Financial product offerings and information dominate newspapers and TV adverts, and they are ever-present on the internet.

When it comes to more complex, long-term or highly individual products such as pensions, investments and protection, it is not so easy to make decisions alone

Trying to digest all this information and decipher whether a product is suitable for you can be confusing.

Some financial products are far simpler than others.

For instance, most people understand how home insurance works, and checking the levels of cover, and terms and conditions of the policy, can seem a less daunting task.

However, when it comes to more complex, long-term or highly individual products such as pensions, investments and protection, it is not so easy to make these decisions alone.

These products come in various shapes and sizes, with greatly varying degrees of suitability for different people.

When making a crucial financial decision such as choosing a pension plan, you need to be aware of what best suits your individual needs, whether there may be better alternatives for you and what level of risk is involved.

Seeking professional advice in these circumstances should be regarded as a priority, much in the same way as you'd turn to a doctor if you had health problems.

Who should I ask?

If you are embarking upon seeking professional advice on your personal finances for the first time, it is always a good port of call to turns to friends, family or trusted colleagues for recommendations.

People queue at the BBC's Money Matters roadshow in Manchester
Many people want financial advice, but are not quite sure where to look

Perhaps they have a long standing relationship with an adviser that could help you also.

However, only an independent financial adviser (IFA) will be able to offer you truly impartial financial advice on all products in the vast world of financial services.

It is vital to be aware of this, and understand that any other advice route will only give you access to a limited range of products on the market.

Finding the right IFA for your personal situation is pivotal.

For example, if you are looking for advice on pensions, you may wish to see an adviser with additional pensions qualifications.

It is important to ensure the IFA is suitably experienced and qualified to advise you on the matter required - and you should of course feel free to ask them questions on this.

Beyond matters of experience and qualifications, it is also vital that you feel comfortable with the adviser you are visiting.

Perhaps you would feel more at ease with a female or male adviser, or one that specialises in a particular product area.

Building a rapport and forging a trusting relationship with the IFA can make a big difference to your experience when seeking advice - and it can result in a professional affiliation which lasts for a long time.

How do I pay for this advice?

The advice you seek from an IFA is not free.

Do not be afraid to negotiate on costs with your adviser

Once your decision is made to visit an adviser, your first meeting should be treated as an introduction and a chance to discuss your priorities and plans.

It is also an opportunity for the IFA to explain the option of paying by a fee, as well as the option of paying by commission - ultimately added to the cost of any financial product bought through the adviser - or a combination of the two.

Paying the adviser a fee (either at an hourly rate or through a fee for the whole job) is known as 'fees only' advice.

These fees vary greatly, typically from around £75 to £250 per hour.

Often the first half hour of your introductory meeting is free as you get to know each other.

Paying indirectly through commission means your adviser fees are deducted by the product provider from the products you may take out.

Often there is not only a commission charged for setting up a plan but there may also be annual commissions on top.

These are known as trail commissions, which the adviser receives as remuneration.

A combination of paying through fees and commission means the adviser will either rebate money back into the financial products you have purchased, or alternatively they will offset the commission against the advice fee charged to you.

Negotiate

It is important to remember that only an IFA is required to offer a choice of payment options, i.e. paying by fee or commission or a combination of the two.

Tied and multi-tied agents do not have to offer you this choice, though some may.

But do not be afraid to negotiate on costs with your adviser.

He or she may well be prepared to reduce their fee or rebate more commission, especially if they want you as a long-term customer.

Careful financial planning, and adapting to changing circumstances, is a lifelong commitment, and the current climate has brought this to life now more than ever.

Taking a little time now to seek professional and independent financial advice from someone you feel comfortable with, could save you a great deal of time and money in future.

The opinions expressed are those of the author and are not held by the BBC unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.



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