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18 Jun 2024

How to find a financial adviser

Everything you need to know about finding a good financial adviser - find out what an independent financial adviser (IFA) does, and the different types of financial advice available.

Megan ThomasResearcher & writer

In this article

What can a financial adviser do for me?
How do I find a good financial adviser?
Independent vs restricted financial advice
Alternatives to financial advisers
Financial advisers and equity release
Financial adviser qualifications explained
What should I look for when choosing a financial adviser?
What if things go wrong?

What can a financial adviser do for me?

You should consider getting financial advice for complex products so that you don't end up with something unsuitable. These include:

Pensions and investments
Life insurance and health insurance
Tax and inheritance planning
Mortgages (via a broker) and equity release products
Long-term care planning

A financial adviser can scour the market to find investments and products that are tailored to your circumstances and ethical concerns, and help you personally plan for the things you want to do with your money in the future.

You can still buy complex financial products without an adviser. For instance if you're confident enough you can use investment platforms which offer a range of products, such as stocks and shares Isas and self-invested personal pensions (Sipps), with lower fees.

However, some products equity release require you to have received financial advice first.

How do I find a good financial adviser?

It's really important to shop around when looking for an financial adviser. A comparison site is a good place to start; Unbiased and VouchedFor are the biggest.

You can use their filters to narrow down a shortlist based on areas of expertise and customer reviews. We recommend setting up meetings with at least three financial advisers so you can decide which can provide you the best service for your needs, and the best value for money.

If you don't need to meet your adviser in person, you could save money by looking outside of your local area. For example, VouchedFor data shows that financial planning costs in South East England tend to be higher than in the north.

The following resources can help you find the best adviser for you. It's best to draw up a shortlist of at least three financial advisers and ring them all before deciding on one.

The Financial Conduct Authority register - the FCA's register lets you check whether your adviser is properly authorised.
Society of Later Life Advisers - a searchable directory of advisers that specialise in later life advice
Personal Finance Society - a searchable directory of PFS members, who could hold certifications including Chartered Financial Planner.
The Chartered Institute for Securities & Investment (CISI) - a trade body for financial advisers. Use its Wayfinder tool to search for financial planning firms by post code that hold CISI accreditation.

You can also take a look at MoneyHelper's Retirement Adviser Directory.

Find out more: Best investment platforms in the UK 2024

Independent vs restricted financial advice

There's an important difference between independent and restricted financial advisers.

If an adviser says they are independent, their advice must be:

based on a comprehensive analysis of the market
unbiased, with no influence from product providers

Restricted advisers will either focus on just one subject area, like pensions, but look at the whole of the market, or could recommend investments from all providers, but just for one type of products, such as only recommending unit trusts.

Other types of restricted advisers may give advice on more than one area, but will only have access to a limited number of providers. This means you won't be getting recommendations from the whole of the market.

If you visit a restricted adviser, it is essential that the adviser explains exactly what service they are providing to you.

Financial providers can be especially useful for investors who want their money to be invested in a particular way - whether you want to avoid controversial companies, or support firms driving positive change.

It is possible to pick your own ethical investments, but the lack of agreed standards on what makes a fund ethical or ESG means you have to do extra checks. An adviser can do these for you, with more knowledge of the sectors concerned.

An adviser who's specialised in this area should ask you about your ethical concerns and interests early on, perhaps by questionnaire.

Also look for advisers who are members of the UK Sustainable Investment and Finance Association (UKSIF).

Some advisers use platforms, which are online services that feature a range of investments in one place. As long as advisers are using them to benefit their clients, platforms are an acceptable part of independent advice. However, advisers should use more than one platform.

Some advisers use model portfolios. These are pre-constructed collections of investments, a bit like chocolate selection boxes. Each model portfolio meets a specific investment risk profile, so one could be high risk, one low risk and one intermediate.

Before recommending a model portfolio, advisers must ensure each investment suits their client - like making sure you like every individual chocolate in the box.

Independent advisers can use model portfolios, but only once they have considered options outside them. They should not use just one model portfolio.

Alternatives to financial advisers

Guidance

MoneyHelper, Citizens Advice Bureau and Pension Wise (for the over-50s) provide free and impartial financial guidance.

A financial adviser will recommend a specific product based upon your personal situation, whereas guidance gives you general information to help you narrow down your choices yourself.

Some investment platforms offer

Robo-advisers

Robo-adviser or 'do-it-for-me' investment platforms assess your attitude to risk and use algorithms to make recommendations, usually a portfolio of funds.

Although usually cheaper than financial advisers, they operate through smartphone apps or websites and rarely offer advice on other aspects, like tax or savings.

1-to-1 guidance from Which?'s experts

For free, impartial financial guidance, Which? Money members can also book an appointment.

With more than 100 years of experience in financial services between them, our team of experts can provide information on a range of personal finance topics, including investment options but also insurance, care costs, tax, savings and seeking reimbursement after a scam.

Financial advisers and equity release

Before purchasing an equity release product, you’re required to get professional financial advice - make sure they are are specialists in equity release. Advisers should hold one of the following qualifications:

CeRER (Certificate in Regulated Equity Release) – awarded by the Institute of Financial Services (IFS).
CER (Certificate in Equity Release) – awarded by the Chartered Insurance Institute (CII).
ERMAPC (Equity Release Mortgage Advice & Practice Certificate) – awarded by the Chartered Institute of Bankers in Scotland. (This qualification was discontinued a while back but may still be held by some advisers.)

You can find a qualified adviser through the Society of Later Life Advisers. The Equity Release Council also has a member directory you can use.

Which? has partnered with HUB Financial Solutions who can also advise on whether equity release is right for you, and how to take out a suitable product if it is.

An alternative is the charity StepChange, which compares providers and can arrange an equity release deal for you through a StepChange Financial Solutions adviser. Advice is free but you'll pay a service fee on completion.

If you take out an equity release product recommended by HUB Financial Solutions, Which? will earn a commission to help fund our not-for-profit mission

Is equity release right for you?

Speak to the experts at HUB Financial Solutions, they'll be able to help

Go to HUB Financial Solutions

Financial adviser qualifications explained

All financial advisers will have to have a minimum qualification equivalent to an undergraduate degree, regardless of the type of advice they provide.

All advisers now have to meet QCF level 4 - the equivalent of the first year of a degree.

The Financial Services Skills Partnership has also created Appropriate Exam Standards (AES), which awarding bodies use to develop new qualifications.

Under QCF level 4, the subject areas financial advisers must be qualified in are:

regulation and ethics
investment principles and risk
personal taxation
pensions and retirement planning
financial protection (Level 3)
financial planning practice

Further adviser qualifications include:

In the UK, certification is available through The Chartered Institute for Securities and Investment (CISI). Those who wish to be a certified financial planner must pass the CISI's Financial Planning and Advice examination.

It's probably the most rigorous of the credentials we looked at, with only 22% of advisers passing the exam and only 8% passing the required case study.

Achieving the qualification requires an extremely close look at a very technical case study.

To achieve chartered status, an adviser must pass at least four specialist exams, be a member of the Personal Finance Society (PFS), and provide evidence of at least five years of experience.

Being a member of the PFS means they must adhere to a code of professional ethics and do a certain amount of continued professional development each year. Of the six exams available, there was a pass rate of just 60% in 2016.

The chartered seal is a well-respected quality mark in financial advice and other professions.

If you want an adviser who aspires to a standard recognised internationally, the International Organisation for Standardization (ISO) offers a further qualification.

The ISO22222 certificate involves an 'at work' assessment of the adviser, designed to measure their ability to perform as a financial planner.

If an adviser holds this qualification, you can be confident that they are able to carry out their role to an objectively measured standard.

Advisers re-certify annually, and undergo a three-year cycle of reviews regarding different aspects of their business.

The ISO qualification also requires advisers to sign up to an ethical code of conduct.

What should I look for when choosing a financial adviser?

Our step-by-step guide can help you understand what to look out for when you choose a financial adviser.

Figure out what you need - If you need retirement advice, it might be best to go for an adviser who specialises in pensions. If you need a complete financial plan, go for an adviser who offers the whole package rather than just focusing on, say, investment advice
Check their qualifications - Although the Retail Distribution Review (RDR) legislation requires that all advisers are qualified to a certain level, it's worth checking that they actually are. Look out for extra qualifications too, as that will show they've gone the extra mile
Negotiate fees - Get quotes from three financial advisers. Don't take the fee the adviser quotes as gospel. If you think you should be paying less, discuss it with them. Find out more in our guide on how much financial advice costs
Get it in writing - Ask for a hard copy of the adviser's recommendations in case anything goes wrong. If you don't understand something, ask the adviser to explain it
Check it's a personalised service - Be sure you're not receiving generic advice that could apply to anyone - ask questions about the suitability of the recommended products with your situation

What if things go wrong?

Financial advisers are regulated by the FCA, and this gives you access to redress should anything go wrong with your advice through the Financial Ombudsman Service (FOS).

This means that you can complain to the FOS if you're unhappy with any advice you've been given or if you think you've been mis-sold, and the FOS can take action - for example, ordering your adviser to pay compensation.

You won't be compensated for investments falling in value, or a company in which you hold shares goes bust, unless this poor performance resulted from bad advice given by a regulated Independent Financial Adviser that has since gone bust.

The Financial Services Compensation Scheme may cover up to £85,000 of investments per person, per product. You can claim for free online: there's no reason to use a claims management company.