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What is financial planning?

And other key questions to ask your financial advisor

Julian Hanrahan, Director, Financial Planning
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Financial planning helps you make sensible decisions about your money so you can achieve your goals in life. If you have never used a financial advisor before, the process to select the right one can be a little daunting. You will want to know exactly what they do and how they can help you. In this article, we will give you the information you need to help you ask the right questions to decide the right financial advisor for you.

Here are some of the questions that you should consider asking a prospective advisor:

1. What does a financial planner do and how will this benefit me?

There are lots of different approaches to financial planning to help you to achieve your financial goals. However, the range of services can differ widely between different advisors and you will want to be confident that you choose the right approach and services to meet your needs.

A good financial planner should work with you to build a comprehensive plan tailored to meeting your goals and aspirations, whether that is understanding your retirement needs, protecting your family, how you wish to pass on your wealth or a range of other needs.

As well as the services they provide there are also other non-financial benefits such as time saving, reassurance and the peace of mind that working with a trusted advisor can bring.

In addition, they will be able to help you take advantage of tax efficient planning techniques and keep you informed about changes in legislation which may impact you. A good advisor should also be able to work alongside other professionals such as solicitors or accountants to achieve a cohesive approach for you.

2. How will my advisor communicate with me?

A lot of us are time poor due to work or family commitments or have little inclination to spend large amounts of time on our financial affairs. Some prefer written communication on paper, others by email.  Some of us only wish to meet face to face and others are happy to speak on the phone or by video link, which has increased somewhat since the lockdown during COVID-19.

Whatever your preference, always make sure that your adviser is going to offer the right approach to fit in with you.

3. How much does financial advice cost?

Fees can be difficult to differentiate between advisers as they may charge in different ways depending on the services they provide.

This can include:

However they charge, you need to understand how much you will be paying them in total for their services and they should provide this in writing before you make any decision to proceed. This should also include any costs incurred should you decide to leave them in the future. You should not incur penalties or additional charges for deciding to go elsewhere if you are not happy.

  1. an advisor’s hourly rate
  2. a flat fee for advice
  3. a percentage of funds to be invested
  4. commission on products an advisor recommends.

4. How can I find out how good a financial advisor is?

In order to gauge the quality of advice and the level of service you can expect you can ask your financial advisor the following:

  • do you carry out regular client feedback questionnaires? If so can I see the results?
  • can you give me references from existing clients?
  • have you won any awards or received recognition for your work?

5. Are you an independent advisor or a restricted advisor? And what is the difference?

An independent advisor will be able to source solutions for you from the whole market considering all products from all providers, which should be given without bias or restriction.

A restricted advisor will be limited to the types of products and providers that they or their firm are able to recommend.

So you should make sure you are comfortable with their approach and whether this meets your needs.

6. What qualifications do advisors need to provide financial planning advice?

As a minimum you should expect your advisor to have achieved the Diploma in Financial Planning qualification. Some advisors may also have achieved further advanced Diploma qualifications, Chartered status or Certified Financial Planner, which shows their commitment to furthering their knowledge in more complex planning and adherence to high professional standards.

Experience is also key. How long they have been practicing for and the type of work they have undertaken can provide you with some reassurance that they can meet your requirements.

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Questions to ask yourself

A good relationship with your financial advisor is built on mutual trust. If they understand you and you get on well with them you are likely to achieve a better experience and outcome. Here are some questions to ask yourself when deciding on a financial advisor:

  • will I get on well with this advisor?
  • does this advisor understand my goals and what I am trying to achieve?
  • can I work with them?

Get in touch

If you would like more information on the issues discussed in this article, please contact your financial advisor or get in touch with one of our financial planning consultants.

Building a career and raising a family

Providing individuals and families the right financial planning advice ensuring you meet your goals and aspirations at every stage of your life.

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Julian Hanrahan
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Risk Warning

Crowe Financial Planning UK Limited is authorised and regulated by the Financial Conduct Authority (‘FCA’) to provide independent financial advice.

The information set out above is for information purposes only and does not constitute advice to undertake a particular transaction. Appropriate professional advice should be taken on specific issues before any course of action is pursued. Any advice provided by a Crowe Consultant will follow only after consideration of all aspects of our internal advice guidance.

Past performance is not a guide to future performance, nor a reliable indicator of future results or performance. The value of investments, and the income or capital entitlement which may derive from them, if any, may go down as well as up and is not guaranteed; therefore investors may not get back the amount originally invested.

The Financial Conduct Authority does not regulate estate planning or tax advice.

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Julian Hanrahan
Julian Hanrahan
Financial Planning Director