These days, the very mention of the word ‘investment’ may send shivers down your spine. After the crash of 2008 left many people out of pocket, a lot of us are still feeling slightly sceptical about spending more money than we might need to. Yet, since the meltdown that saw huge swathes of the population losing out, there have been dramatic changes in the industry, bringing in much more stringent rules and regulations for the financial sector which has, in turn, helped to ensure investor safety.
Aside from this, there is likely going to come to a point in everyone’s lives where a significant and potentially complicated investment may arise, such as a mortgage or planning for your retirement. Trying to sort these kinds of financial decisions out alone could spell disaster without the help of a professional and you could stand to lose a significant amount of money. With this in mind, more and more of us are bucking the trend and finding benefits by enlisting the help of a financial advisor to aid in their choices.
Yet, for those of you who are still somewhat sceptical of the idea of using the skills a financial advisor has to offer, you’ll likely be wanting to ensure that you find the perfect consultant for your needs. Indeed, with a seemingly endless number of markets and an advisor on hand for each one, you might be finding the task of sourcing the right person for you to be pretty daunting. Luckily, there are a few ways to help you make the right decision. With this in mind, read on for our top tips on picking the perfect financial consultant for you.
When looking to invest in a financial advisor, the very first step you need to take is discerning what aspect of your finances you need help with. Our lives are inundated with financial decisions on a day to day basis, some of which are vital whilst others are pretty mundane. For many of these more simplistic decisions, it is unlikely that you’ll need specialist financial advice to aid you. With services like the Citizens Advice Bureau to assist with minor money situations, you won’t need to worry about investing in an expert.
However, that isn’t to say that there are not many different reasons as to why the help of a financial consultant could prove pivotal to you. Those with larger amounts of savings and a variety of assets can really benefit from personal financial planning advice, especially when a significant life event with the potential to cost you arises. Examples of this could be divorce proceedings, retirement, or the notoriously complex field of investment. Whatever the case, it’s important to ascertain what you are needing advice on, giving you a focused view when finding the right candidate.
The financial advice sector can be split into two main categories that need to be understood before proceeding any further; these being independent and restricted firms. Although both offer advice, they have different levels of authority as determined by the Financial Conduct Authority (FCA).
Consultants who advertise themselves as an independent advisor have the ability to inform you of all financial markets, however, their services will usually cost more. These specialists will still have to remain unbiased and impartial during the process as stated by the FCA so you needn’t worry about any conflicting interests.
Restricted consultants, on the other hand, are only allowed to advise on specific products or providers and are not legally allowed to advertise themselves as independent financial consultants. The firm will also need to clearly demarcate itself from independent firms and advertise as a restricted advisor if you are unsure, it is important to press on the matter.
Whichever type of firm you decide to invest in, they will both be required to follow the strict regulations set out by the FCA, meaning you can rest assured that you will be working with quality.
When it comes to the costs of your financial investor, it’s likely you’ll be wanting to find ways to make it as affordable as possible. With this in mind, there are three main ways that financial advisors charge their clients so it is important to understand these and ascertain which is best for you:
Percentage fee: The most common method of payment utilised by financial consultants, advisors will take an initial percentage on hiring their services and will usually take another percentage cut annually; this can range between 0.5 – 5% so it is important to ask beforehand.
Fixed fee service: If you’re looking for advice on a singular project rather than on an ongoing basis, a fixed fee per service may be a more suitable option. Paying for a specific project thus gives you the opportunity to easily walk away after it’s finished.
Hourly rate: A more recent payment option used by consultants is by using an hour by hour rate, resembling how solicitors usually charge. This can be a flexible option, however, it is important to have at least some form of an idea as to how long the process will take so you know how much you’re paying.
When meeting on your initial consultation it is important to ask how payments need to be made. These three options are the most common, however, certain firms may have their own unique pay structure.
When it comes down to it, you need to be working with an advisor you can trust. You may be working with this firm or individual on a regular basis for a long time so it’s important to ensure that you’re happy with the work being carried out.
Of course, one of the easiest ways to start to create an idea of a firm is by seeking recommendations from friends, family or even online sources. Word of mouth is still an important litmus test of any businesses success rate, however, it should never be the be all and end all of your research. It’s always a good idea to source two or three different quotes from various IFAs or RFAs depending on your needs.
Once you have decided on a firm that you believe will be best, it’s essential to have a face to face meeting. Have your financial goals in mind beforehand in order to get the most out of the meeting and don’t be afraid to ask questions; this is your money after all so you’ll want to be sure you’re working with quality.
Whatever you do, it is essential that your chosen firm is working within the remit of the FCA. The ruling body that regulates the financial sector is the legal standard by which all advisors in the UK must abide by. You can check this by having a look at the FCA’s register of financial advisors to see if they are authorised to do business.
Sometimes, a little bit of advice can go a long way and this is no different when it comes to your finances. Whether you’re making plans to retire or looking to invest, having a quality financial consultant at hand can make a real difference. Here at Maxim Wealth Management, we have been offering our expert services to the people of Glasgow, helping them to achieve the financial success they desire.
Offering objective and unbiased advice based around your fiscal situation, we can create a bespoke plan to ensure you meet your financial goals. Our primary focus is upon helping those near retirement to plan for the future through expert tax, estate and incoming planning. However, our services don’t stop there, offering advice on pensions and investments to make your money go further.
For more information on our range of services or for a free initial consultation, visit our website or get in touch with a member of our team on 0141 764 0040.