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Financial planning
29 May 2023
Author: Punter Southall Aspire

Choosing the right financial planner: five things to look for and five to avoid

Choosing a financial planner is a significant decision. The right professional could help you reach your goals faster, save money and help you make more informed choices.

But choosing the wrong one could lead to poor recommendations and worse outcomes, so it pays to take the time to carefully select someone who meets your requirements.

What five things should you look for? And what five things do you need to avoid?

Five points to look for

 #1 Regulation

When speaking with someone who claims to be a financial adviser or financial planner, check they are regulated by the Financial Conduct Authority (FCA).

The FCA puts strict rules in place, helping to protect consumers from bad advice and inappropriate products.

You can normally find a company’s legal information on their website. You can then cross-check this quickly, and for free, with the information on the FCA online database.


#2 Communication

If you contact a financial planner are they professional, helpful and clear with you?

A financial planner who does not answer your calls or emails at the outset is unlikely to be reliable in future. You need to feel valued as a client and if you ask for help or guidance, it should be answered in timely and considered fashion.

Good communication also means a financial planner can explain complex ideas, rules and information in a way that makes them understandable. You should be able to clearly grasp the potential rewards and risks of different products or actions after every conversation.


#3 Experience

Are they experienced in working with people like you?

For instance, if you work in the public sector, such as a doctor or senior police officer, have they worked with similar clients? This is likely to help if, say, you need advice about your pension, which could be different to schemes in the private sector.

If you are a UK citizen living abroad, have they dealt with other international clients? Have they advised them on complex matters such as investment planning, pension transfer and inheritance tax?

For initial reassurance, you may be able to find testimonials on a financial planner’s website or you can ask directly for examples.


#4 Transparency

A good financial planner should always be transparent and open about their costs. You should know before you begin what you are paying for and what it buys.

Financial planners tend to charge via fixed fees, commissions or a combination. A fixed fee-based planner may be preferable as this is the model the FCA leans towards.


#5 Client-centred

When speaking with a financial planner, do you get the sense they are only trying to sell you a product? Or are they interested in a long-term relationship?

If a professional takes time to get to know your unique financial situation, goals and risk tolerance, this makes them more likely to place heavy emphasis on your needs and helping you meet them.


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Five things to sound alarm bells

#1 No cold calling

A “good” financial planner will never resort to unscrupulous sales tactics. For instance, cold calling about pensions has been banned since 2019. Yet it still happens.

The rules are different if the caller is FCA-regulated or has a pre-existing relationship with the person being called. However, as a general rule, be wary of companies which use marketing tactics not based on your previous consent.


#2 Avoid high-pressure tactics

If someone is putting pressure on you to make a decision such as investing in a must-have opportunity, treat this as a red flag.

Legitimate financial planners recognise that clients face big decisions about their money and need time to evaluate their options. They will give you time to weigh up the pro’s and cons and make themselves available to answer any questions.


#3 Do not ignore your gut feeling

If you do not feel comfortable with a financial planner, there is no obligation to work with them. This is why a free, initial consultation helps. It gives you a chance to “test the water”.

Sometimes, a financial planner has the qualifications and experience you are looking for but you don’t really get on. This is perfectly okay.

Other cases are more clear-cut. If a financial advisor is rude, talks down to you or ignores your spouse or partner, these are signs that you should look elsewhere.


#4 Check track record

Has the financial planner been “disciplined” by the FCA or other authorities in the past? Do they have a number of legitimately negative client reviews online?

You can find a list of financial services companies which have been fined on the FCA website. Client feedback can also be found on places like Google Reviews, Trustpilot and established planner directories.


#5 Watch for conflicts of interest

Ultimately, a financial planner should put your needs first as a client. If their business model could undermine their objectivity, you’re not the priority.

Some professionals are incentivised to promote specific financial products. If so, they may not have your best interests at heart.

The key,again, is transparency.

Some financial planners work in what’s known as restricted advice, offering services and products from a particular, limited range.

Others offer a “whole of market” service, which is financial services speak for combing the entire market to find a service or product suitable to your needs.

What’s important is that they make this clear at the outset, explaining what it means for you.

Get in touch today

At Punter Southall, we have a team of highly skilled risk, compliance and legal experts with deep in-house practical experience. Get in tough if you would like a friendly chat with one of us.