Seeing A Financial Advisor
For many people, finance is a difficult and confusing subject. We are forever being told of the importance of saving and investing, and reading grim headlines about the collapse of pensions- and, we're all living longer. How will you pay for your retirement? Will you be stuck behind your desk until the age of 70?
This is why it's a good idea to see a financial advisor- but this can seem a daunting prospect at first. Financial Advice covers a wide range of areas, including pensions, mortgages, insurances, savings and investments, so you should ideally seek advice from a company that works in all of these areas, in order that they can view your finances as a whole, and make the best recommendations for you.
Choosing a Financial Advisor
So, how should you choose a financial advisor? There is a huge choice of potential advisors, but this is a very important role in your life, and you should be careful to ensure you are getting the best advice for your needs. The first thing to realise is that financial advice is not the preserve of the wealthy. Anyone with an income or some available money can do things to improve their finance, and even if you can only save a little each month there are ways of making this into a worthwhile investment.
Another key point is that you don't have to pay a fee up front for financial advice- your advisor should be able to offer you the choice between paying a fee directly and requesting that the advisor receive a commission from the product provider.
Typical Financial Advisor Work
For many people, the first time a financial advisor becomes necessary is when they are trying to arrange a mortgage. At this time, many of the estate agencies you visit will offer you a financial advice service- but think carefully before you accept this. You should ensure that the advisor operates independently of the estate agents- it's hard to play hardball with an offer on a house if the company already know how much mortgage you have been approved for!
A second problem is determining how independent your financial advisor actually is- many advisors have arrangements with insurance companies, and favour these companies above other deals which may be cheaper for you. For example, I initially arranged my life insurance with an "independent" financial advisor who was linked to an estate agent, but then reviewed the deal with a new financial advisor- the second advisor saved me £1 a month, which is £300 over the 25 years of the deal. The second advisor is from a specialist Financial Advice company, and is backed up by a team of researchers monitoring the whole market place to find the best deals- you should be clear that your advisor will offer a similar service.
The most important thing to check is that your financial advisor is properly authorised with the Financial Services Authority. You can check their list of approved agents at http://www.fsa.gov.uk/register/home.do. If you accept advice from an unauthorised agent, it makes it very difficult to take action if problems develop at a later date. Your friends and family will probably have recommendations, but you should double check these- be sure to look the company up on the web.
For further advice and explanation of this, please see the Financial Services Authority website at www.fsa.gov.uk
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