Finding a good adviser

How to check someone is who they say they are, what to ask, and what to walk away from.

Most advisers are competent and act properly. The ones who aren't cause enough damage that it's worth knowing how to tell the difference before you hand anyone your pension.

Check the register first

Every firm and individual giving regulated advice in the UK must be authorised by the Financial Conduct Authority.

Search the FCA Register at register.fca.org.uk. Check the firm's name, its reference number, and that it's permitted to give investment advice. Check the individual too.

Two things to be alert to. Clone firms — fraudsters copying a genuine firm's details — are common, so use the contact details on the register rather than the ones you were given. And a firm authorised for something else entirely isn't authorised to advise you on investments.

If a firm isn't on the register, stop. Without authorisation there's no Ombudsman and no compensation scheme, and unregulated investments are where the worst losses happen.

Independent or restricted

Independent advisers can recommend from the whole market.

Restricted advisers are limited — sometimes to one company's products, sometimes to a panel. Restricted isn't automatically bad, but you should know which you're dealing with and what the restriction is. They have to tell you if you ask.

Be particularly alert where an adviser recommends their own firm's investment products alongside their advice fee. That isn't necessarily wrong, but it's a conflict worth understanding.

Qualifications

The minimum for giving advice is a Level 4 qualification, and every authorised adviser holds one.

Beyond that, Chartered Financial Planner and Certified Financial Planner are the recognised higher standards, requiring further examination and experience. Specialist areas have their own — anyone advising on defined benefit transfers or equity release needs additional permissions and qualifications.

Qualifications indicate commitment rather than guaranteeing quality, but for complex work they're a reasonable filter.

Questions worth asking

Ask these of anyone before engaging them:

Are you independent or restricted? If restricted, restricted to what?
How are you paid? Initial fee, ongoing fee, and how each is calculated. Is the initial fee a fixed amount based on complexity, or a percentage of what I invest? In pounds, not just percentages.
What's included in the ongoing fee, and what happens if I stop paying it?
What are your qualifications, and how long have you been advising?
Who are your typical clients? An adviser whose clients look nothing like you may not be the right fit.
What's your investment approach, and what does it cost on top of your fee?
Will I deal with you or a team?
What happens if you retire or the firm is sold?

A good adviser will answer all of these straightforwardly. Evasiveness about fees in particular is the clearest warning sign there is.

Walk-away signals

Contacted you out of the blue. Cold calls, unsolicited emails and social media approaches about pensions or investments are overwhelmingly either scams or poor practice. Legitimate advisers get clients through referral and reputation.
Pressure to decide quickly. Nothing legitimate expires this week.
Guaranteed returns, or anything described as high return and low risk. This combination does not exist.
Unregulated investments — overseas property, storage pods, car park spaces, carbon credits, unlisted bonds. No compensation scheme, and these dominate the worst outcomes.
Vagueness about fees, or a reluctance to state them in pounds.
A product before a conversation. Anyone recommending something before understanding your circumstances is selling, not advising.
Pushing a defined benefit transfer without a thorough analysis, or presenting the transfer value as obviously attractive. This is the highest-risk advice area in the market and the one with the worst record.
Asking you to transfer money to them personally, rather than to a regulated provider or platform in your own name.

Practical steps

Meet more than one. Initial meetings are usually free, and the difference between advisers becomes obvious quickly.

Ask for a sample suitability report, anonymised. It shows you how they explain their reasoning.

Check they're comfortable saying no. An adviser who tells you a proposal isn't in your interest is worth more than one who agrees with everything.

Take your time. Any adviser who objects to you thinking about it has told you something useful.

This article is for general education only and isn't personal advice or a recommendation of any firm.