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5 questions to ask when looking for the right financial adviser

11 August 2021

Professional people in a meeting looking for right financial adviser

Whether you’re a first time investor looking to save for the future or you’re a little more financially experienced, finding the right financial adviser is hugely important. 


It’s essential that the client/adviser relationship works well so you’ll want to do some research as you look for the right person. 

Here are 5 important questions we suggest you ask: 


What is your typical client like?


Financial adviser signing paperwork with clients

Ask your potential new adviser if they’ve worked with clients of similar financial backgrounds to yours and provide examples of their portfolio performances. You’ll also want to know what financial milestones their clients are saving for, whether for retirement, school fees or other personal reasons. It’s commonly assumed that financial advisers will only work with high net worth clients Whilst it’s true for some advisers, there are others who are happy to take on a mixture of large and small investments. 

It might seem like common sense to go with the adviser with the most qualifications or the best online reviews but if they have no experience managing clients whose investor profiles match yours then it’s better to look for someone more suitable. 


How will our relationship work/how much client contact do you have?

Financial adviser and client shaking hands and smiling across table

Regardless of the level of involvement you want to have, a good adviser will keep you in the loop about anything that will impact your investments. They should review your portfolio performance regularly with you and explain the reasons for any suggestions they make about altering your investment choices. 

Client communication is essential and your adviser must take the time to analyse your finances, attitude to risk and create your client profile. You should also find out about all the fees that you’ll need to pay and why as well as how your adviser will collect their payment. 

Some advisers are fee-only and others are commission-based meaning in addition to a percentage of your investments, they will also be paid commission for recommending certain products and services. Your adviser is there to guide and encourage you to learn more about investments, it’s a red flag if they try to use technical jargon all the time without explaining. 

Whilst you might not be able to see your adviser as often as you’d like to, you should at least have an annual review of your investment performance and strategy. Remember with long-term investing it’s better to check your investments regularly but not as often as every day. For your own peace of mind, it’ll be worth asking whether you can keep track of your investments online. 


Where will you put my investments?

Woman watering the plants in her garden and helping them grow

You might not know as much as your adviser about how the market works but you should feel confident enough to trust their judgement and that they will uphold your investment values. Your adviser should work out your attitude to risk and recommend investment opportunities that match your investment profile. For example, if you want to make a positive impact with your investments then your adviser may suggest investing in Environmental, Social and Governance (ESG) funds. 

Ask an adviser about their investment philosophy to give an indication as to how they plan to help you navigate the market and reach your goals. The most common philosophies include value investing (buying shares which they believe are currently under-priced), growth investing (buying shares which are predicted to generate high stock prices and growth) and contrarian investing (going against the market current by buying when everyone is selling and vice versa). 

At different points in your journey, you’ll need to move to different funds that will help you grow and preserve your wealth so it’s important for both you and your intermediary to keep an eye on fund performances. If you’re not comfortable or you’re unsure about the funds you have or plan to invest into, remember that your adviser is there to listen and address your concerns. 


If things go wrong, how am I protected?


Financial Adviser on the phone smiling

There’s no such thing as a ‘safe’ fund because investing will always carry a degree of risk which is why it’s important to not put all your eggs into one basket and invest into funds which seem ‘too good to be true’. Your adviser can help with diversifying your portfolio to mitigate the impact that market fluctuations have on your investments. You should be prepared for the worst even if it doesn’t happen and your adviser should have the correct measures in place to ensure that your money is protected. If you were ill, you wouldn’t go to see an unlicensed doctor to cure you so don’t entrust your investments with an unregulated adviser. 

All financial advisory services, both firms and independent advisers, should be regulated by the relevant Financial Authority in your country. You also need to know if they abide by a Code of Conduct, sometimes referred to as Code of Ethics, which states all advice given is for the best interests of yourself and not for personal gain. UK financial firms, for example, will follow the Chartered Insurance Institute’s Code of Ethics and the Chartered Institute for Securities and Investment’s code of conduct. You can also search Financial Conduct Authority register to check that your adviser is regulated – this means that you can dispute any issues that might happen along the way e.g. insolvency of the company. 


If I move away, will you still be available to help me?


Two housemates relax after moving house

If you plan to live abroad then it’s important to find out whether your adviser is in it for the long haul. Some intermediaries only practice within the country that they’re based, which means that when you move you’ll have to repeat the process of finding another adviser and risk incurring termination fees for your current contract agreement. At the very least your current adviser will explain how living outside your home country will impact your investments – tax, pension and repatriation are just some of the factors to consider. 

Your new adviser will have to go through and re-assess your client risk profile and portfolio of investments. Living in an unfamiliar financial jurisdiction doesn’t necessarily put your investment at risk but there are factors such as a new cost of living and total income, especially if you’re working, which can affect the amount you’re currently investing. 

Although there’s a smaller selection to choose from, you can find intermediaries and offshore advisory firms who specialise in helping expat clients.