Do you need a financial adviser?
If you’re looking to invest, buy a financial product or plan for the longer term, whether or not you need financial advice will depend on a number of factors such as what product you are looking for,How complicated your finances and personal circumstances are and your short and long-term goals.
What services do financial advisers offer?
Professional financial advisers carry out a ‘fact find’ where they ask you detailed questions about your circumstances, your goals and how you feel about taking risks with your money.
Then they recommend financial products that are suitable and affordable for you.
Types of financial adviser
Financial advisers offer services ranging from general financial planning and investment advice, to more specialist advice, such as the suitability of a particular product such as a pension.
In the case of investment products, some advisers are ‘independent’ – meaning they offer advice on the full range of investment products from the market, while others offer a ‘restricted’ service meaning that the range of products or providers they will look at is limited.
What are the benefits of getting advice?
If you buy based on financial advice and a recommendation, you should get a product that meets your needs and is suitable for your particular circumstances.
Depending on the type of adviser you use, you may also have access to a wider range of choices than you’d be able to assess realistically on your own.
You also have more protection if things go wrong if you buy based on advice – see below.
The difference between advice and ‘non-advised’ sales
Many banks, building societies and specialist brokers will talk you through your different options and leave it up to you to decide which product to take.
In this case you are buying based on ‘information’ and have fewer rights to claim compensation if the product turns out to be unsuitable.
By contrast, if you end up with an unsuitable product after getting advice and a recommendation you could have a case for ‘mis-selling’ – though this doesn’t protect you against making losses if the market goes up or down.