Managing your finances: how a financial advisor can help you to make the right decision

POSTED: 4th July 2014
IN: Guides

Making a major financial decision can be a daunting process, particularly if you feel that you don’t fully understand all the different products available or simply don’t have the time to do lots of research.

undefinedWhether you’re investing in something that is important to you, taking out a mortgage,  or planning for retirement, getting professional advice can really help you to make an informed decision and find the right product for you.

This is where some people turn to financial advisors for help. They will ask you detailed questions about your current circumstances and what you’re looking to achieve. They will also ask you how you feel about taking risks with your money and will recommend relevant financial products to suit you and your situation. Many financial advisors will specialise in certain subjects, so if you want to buy a property and need mortgage advice, then you can request a mortgage specialist to assist you. 

The services that financial advisors have to offer cover almost every facet of personal finance and can help you to find the most appropriate solution to achieve your goals.

Some financial advisors are independent and can therefore make recommendations based on the full range of products on the market from various providers, while others work for a specific bank or building society and will base their solutions on what products they can make directly available to you.

When should I ask for financial advice?

If you’re thinking of making a big decision that could either make you a lot of money or cost you a lot of money, such as an investment or mortgage, then financial advice could be a really valuable option.

It’s worth asking yourself the following questions:

  • Do I have time to do some research?
  • Do I understand the different types of products available?
  • Can I afford the products available?
  • If things go wrong, will I know what to do?

If you answer no to any of the above, then you may benefit from financial advice.

What are the benefits of getting advice?

Receiving financial advice from someone in-the-know can be really beneficial as it will help you to make an informed decision and make the right choices. Financial advisors know that not everyone has extensive knowledge when it comes to finance, and so they can be really helpful if you find the variety of products available a little overwhelming.

Also, if you make a decision based on advice given to you, only to find further along the line that the product isn’t suitable, you may be protected by your advisor’s insurance.

What types of advice are on offer?

Professional advisors can be divided into two groups – ‘independent’ and ‘restricted’.

An independent financial advisor (IFA) has to provide you with information to represent the full range of products from all the different providers to offer you an un-biased representation. They also must not be influenced by any particular bank or building society.

On the other hand, restricted financial advisors can only inform you about a selection of products and cannot describe themselves as independent. This type of advisor usually works for a high street or online bank or building society. There are also some advisors who are defined as ‘restricted’ because they specialise in a particular area, such as mortgages or pensions. This type of advisor can be really helpful as they will have expert knowledge in the field that you require help with.

If you’re struggling to make sense of all the financial products available, there are two possible options for you in terms of guidance.

How much does financial advice cost?

On December 31st 2012, new legislation was put into place by the Financial Conduct Authority (FCA), to ensure that financial advisors abide by certain guidelines. This legislation also requested that advisors set a charging structure and will not be able to take commission for new advice. Since December 2012, advisors also need to disclose upfront how much their advice and guidance will cost and how they would like to be paid.

Charging structures can vary depending on the advisor and rates are required to reflect the standard of service that is provided. In some cases the cost may be deducted from a client’s investment or may have to be paid by cheque. There can be fixed fees or hourly rates. Many advisors will be able to offer you a guide of pricing options to give you an indication of how much you will need to pay. 

Making financial decisions can be important milestones in a persons’ life and so if you’re ever unsure of what to do, it’s worth remembering that there is support out there for you.

If you’d like to open a savings account or a cash ISA, you may find that you don’t need a financial advisor and can go it alone. This type of product can easily be bought directly from your provider and you can use comparison sites and tables to help you to make your decision. But if you do require an advisor to help you with your savings accounts, that’s okay too.

Aldermore is a specialist provider of personal savings accounts and Cash ISAs. For more information about our products, don’t hesitate to get in touch to speak to a member of the Aldermore personal savings team.



The content published on this website is intended to provide information only. The reader should seek advice from experts on the subject matter and independently verify the accuracy and relevance of any information provided here before relying upon it or using it for any reason. You can view our terms and conditions here.

Want to read more?

Related Links

  • Savings
  • Personal Savings
  • Business Savings
  • Guide