Finding an Independent Financial Advisor

by David Redmond on 22 Feb, 2011

For those with large amounts of money, a financial advisor is almost a necessity. Unless you plan on researching until you know as much about financial products and services as a working professional, there really is no substitute for good advice.

Finding good independent financial advisors is no easy task, however, not putting the effort in could very well lose you money.

The first thing to look out for is whether or not they really are independent. Broadly speaking, there are three types of financial advisor in the UK: tied, multi-tied and independent. Tied advisors are those working for one organisation (your bank for example) who are only qualified to advise you on their products, and make their money on commission.

Multi-tied are qualified to advise you on a variety of products for different organisations, but are still affiliated with them, and also make their money on commission. Independent advisors are not linked to any particular organisation and so are less likely to push you a product that is not suitable simply because they work for a particular company.

Independent financial advisors work on either a commission or fee basis. Following new FSA regulation, any independent financial advisor must offer you the option of paying by fee rather than commission. Although the advice will not come cheap, it is another step towards securing impartial advice, as there is no incentive to push something that may not be right for you, but that will earn the advisor a large commission.

We are lucky in the UK that financial advisors are so heavily regulated by the FSA, as there is an official complaints procedure in place if you feel you have been misadvised that can even lead to financial compensation.

That being said, it is a long and arduous route to compensation, so better to do your research first and prevent any need for it. A good advisor is worth their weight in gold, so do your research. Talk to anyone you know who has already used an independent financial advisor. Find a 3 or 4 on the internet. Go talk to them. Talk to 2 or 3 of their clients each.

When you talk to your prospective financial advisor, make sure you cover what your objectives are and what their areas of expertise are. Some will be better qualified to advise you on pension funds than investing in shares. Not all financial advisors are the same.

For those with large sums of capital, gaining independent financial advice is essential to making the most of your money. Just make sure that that’s what they’re doing, rather than making the most of theirs.

About the Author

David Redmond


David Redmond is a Partner of Don Gilliard Finance Group. He is a fee-only, independent financial advisor and financial planner. For over 15 years, he has been helping individual investors and their families realize their investment goals.