15th January 2019
You can spend your life working hard and following all the advice you pick up along the way. If you’re financially savvy, you might be able to pay off your mortgage quickly, put plenty into savings and build a nice nest egg to retire with. Getting a financial adviser to guide you through the process can be a great idea, but when you hand someone the keys to your capital, you want to make sure they know what they’re doing.
There are plenty of excellent financial advisers out there whose services are well worth employing; there are also some that will unfortunately lead you into hidden fees and tax-planning blunders and not grow your nest egg as much as you’d like. Picking the right one is important, so how should you go about doing that if you don’t have an adviser already?
The generally accepted theory is that a personal recommendation from a trusted friend or colleague is the most foolproof way to find a good financial adviser. People often consider advice from those with high salaries as reputable, taking the “if they’re good enough for them, they’re good enough for me” approach. We’re proud to say that we’re recommended by a very high percentage of our clients, but there are valid questions around whether this is the best way to choose your adviser.
As a society in general, we’re not particularly financially literate. The chances of your next door neighbour, sister in law or your colleague knowing what constitutes a good financial adviser better than you do yourself might be considered unlikely. Having the skills or knowledge to command a high wage is not the same as knowing what’s best to do with that money, or how to judge the decisions of your financial adviser.
The best thing you can do to ensure you make the right decision is to inform yourself of what it is you actually need and make sure that’s what your adviser is providing. Are they going through their investment process with you? How often will they be providing you with reviews? Will they be giving you a full plan or just undertaking a single transaction, like transferring a pension? Can they provide testimonials from existing and past clients? What fees do they charge? Are they independent, or restricted? As always – knowledge is power!