Questions to ask your Financial Adviser
When you first meet with a financial adviser, they will ask you a number of questions to help them recommend a financial plan for you. They will ask about your current financial position, what your goals are, which products you have already, and how you feel about taking risks with your money.
But as well as coming prepared with your relevant paperwork and financial goals, you should also come armed with questions of your own. We’ve put together a list of questions to help you.
Q1: Are you approved by the Financial Conduct Authority?
The adviser should be regulated and approved by the FCA, and you can check the Register to ensure we are. Our FCA registered number is 563812.
If you use an adviser that is not approved by the FCA, you will not have access to the Financial Ombudsman Service (FOS) or Financial Services Compensation Scheme (FSCS) if things go wrong.
Q2: What experience and qualifications do you have?
The FCA has increased the minimum standards of qualification that financial advisers have to meet to ensure their knowledge is up to date. Advisers have to be qualified at Level 4 or above of the Qualifications and Credit Framework (equivalent to the first year of a university degree). Professional advisers also need to obtain an annual Statement of Professional Standing (SPS).
All of our advisers are fully qualified to at least level 4 and have up to date SPS. Some of our financial advisers have chartered status, which is higher than Level 4. We are very proud of our team and their achievements, so please feel free ask us to show you our qualifications and SPS.
Q3: What type of financial advice do you offer?
Financial advisers can offer ‘independent’ advice, where they can consider products and providers from the whole market or ‘restricted’ advice, which is limited to certain products, providers or both.
Your adviser has to clearly explain if they specialise in certain areas, such as shares, funds, units, insurance products or anything else, and the providers they look at.
All of our advisers at Compass offer independent advice from the ‘whole of the market’.
Q4: What are your charges?
It is important to understand what fees and charges you will pay for advice and when you will be expected to pay. At Compass, generally, our initial consultation is free. If there is a fee, we will tell you before the consultation.
We will also tell you the amount of any one-off fees and regular fees if the advice is ongoing. If you are not clear about the costs at any stage, you are of course free to ask us. Professional financial advice is very valuable and we want you to understand the costs as well as the benefits.
We do not take commission from any investments with product providers. We have a duty to tell you upfront how much our advice and service costs.
Q5: Can the cost be deducted from my financial investment?
We will agree with you how you will pay for the advice you receive. Ideally the cost of the advice is separate from the cost of the product. However, in some circumstances we will give you the option to make a payment from your initial investment rather than paying a fee upfront. We may accept payment in instalments if you have a regular contribution contract, but this is not permitted with lump sum investments.
Q6: How do you assess my financial needs?
We will explain the process that we use to decide how to advise you and which products to recommend to you. We offer unbiased financial advice, so we will need to ask questions about your circumstances, current provision, plans, goals, attitude to risk, and any expected changes.
Our independent advice does not necessarily lead to a product sale. Our role is to assess your needs and show you how to reach your goals. This service is paid for by you rather than being dependent on you taking out a product.
Q7: How do you assess whether a product or investment has the right level of risk for me?
We use specialist tools and detailed conversation to assess this for each client. We will explain what we consider your risk profile to be and how each recommendation or product fits in with this. If you think you are prepared to take more or less risk than we suggest, please ask us to explain how your risk profile was decided and whether it should be changed.
We are looking after your money and it is important to us that you are confident that our advice is right for you. There is no such thing as a ‘silly question’ when it comes to looking after your money or loved ones.
Q8: How will I receive the advice?
At Compass, we will give you advice face to face and confirm it in writing in a report called a ‘suitability report’ that we will then send to you. If you would like your report in a different format please let us know and we will confirm if there are any different prices for each.
Your suitability report is an outline of your financial adviser’s recommendations. Check this carefully to ensure it reflects the discussion you had with the adviser in your meeting, and that you understand why they recommended a particular plan or product.
Q9: Do you offer an ongoing financial advice service and how much does it cost?
As well as providing an initial recommendation, a core part of our service is the regular reviews we carry out. For wealth management for example, this might be an annual review to check the value of your financial investments and consider any changes to your circumstances.
It may be that we check your risk profile, make sure you are not missing tax-saving opportunities, or see if we can improve the tax effectiveness of your portfolio. You do not have to use the ongoing service but if you decide to we will explain the options and fee(s) involved.
Q10: How often should I review my financial investments?
You should ask your adviser how often they recommend reviewing your investments based on your circumstances. Most experts suggest that at least once a year is sensible to ensure your investments are in line with your risk profile.
There are often government budget changes that will add or remove tax allowances – it is important to review these regularly to make sure you don’t miss out. Your financial adviser will discuss and agree the best approach with you.
Q11: Who will look after my advice?
We will let you know who will be giving you advice and also explain any other contact points when we meet – for example who to go to for any ad hoc questions or to deal with any relevant administration. We will look after you, as we care about your wellbeing and financial prosperity.
Q12: How do I make a complaint?
If you wish to register a complaint, please write to us at our usual office address, or telephone us on 01603 717202. A summary of our internal complaints handling procedures for the reasonable and prompt handling of complaints is available on request and if you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service at www.financial-ombudsman.org.uk or by contacting them on 0800 0234567.