The Financial Conduct Authority (FCA), our industry regulator, has been monitoring the financial services sector and has uploaded two articles to augment the ‘financial advice’ section on its website.
The first details the types of advice consumers have the option of receiving; independent or restricted.
The second article seeks to empower clients further to ensure they have all of the information they require to define the services on offer and to ensure that they are suitable for them.
It tells prospective clients to “plan in advance by pulling together your relevant paperwork, thinking about your financial goals and preparing a list of questions to ask”.
In total there are 11 suggested questions for consumers to ask financial advisers, most of which seem to be designed to confirm that the adviser is Retail Distribution Review (RDR) compliant and that the client properly understands the service they are providing and how they have to charge for it under the new regime.
1. Are you approved by the FCA?
2. What experience and qualifications do you have?
3. What type of advice do you offer?
4. What are your charges?
5. Can the cost be deducted from my investment?
6. How do you assess my financial needs?
7. How do you assess whether a product or investment has the right level of risk for me?
8. How will I receive the advice?
9. Do you offer an ongoing service and how much does it cost?
10. How often should I review my investments?
11. Who will look after my advice?
It is vital, that as a consumer, you are aware of the type of advice you are receiving and what costs are involved for acting upon it.
Trust and rapport build over time and you must be comfortable that whoever you choose to help you reach your financial goals is the most appropriate person or firm to work with.