7 steps to finding your perfect IFA

Published on 8 June 2021
Categories: Commentary
Tags: , ,

Comment by Stephanie Bebbington-Dyke, Chartered Fellow FCSI DipPFS, CEO and Founder of Blue Fox Wealth

It’s no surprise that I am a fan of sound independent financial advice.  I have seen the difference it can make to life goals, peace of mind and the bottom line.  Your wealth, money and financial aspirations are extremely personal, so appointing a professional you can trust and like to help you achieve the best financial outcome is key.  

After all, it is a decision that will offer lasting benefits to you, your family, and your legacy.

So, who do you turn to? With the choice of over 26000 financial advisors in the UK today (source: Financial Conduct Authority) how do you choose the perfect advisor to make your pensions, investments and assets work for you? 

Here is a list of the 7 key steps to assist you in your search:

Step 1: Independent or Restricted?

Finding out whether the Financial Advisor is independent or restricted is the first step.  

An Independent Advisor is unrestricted in the recommendations they give.  They can provide advice and guidance on products from the whole of marketplace.   You will be safe in the knowledge that their advice will be unbiased. You may also see IFA (Independent Financial Advisor) in their literature.

On the other hand, a Restricted Advisor can only advise on certain types of products or select from a single or limited number of providers. They do not have to tell you if you could buy the product at a lower price from another company. 

The best way to find out if an advisor is independent or restricted is to simply ask!

Step 2: The search

Word of mouth is always a valuable source. Speak to friends, family, and neighbours to find out if they have had experience of using an Independent Financial Advisor (IFA) and how were they able to help them.  Your Professional contacts such as Accountants and Solicitors will frequently work with IFAs and may be able to recommend names to you. 

Dedicated search websites like Unbiased or Vouched For have become very popular over the last few years. Whilst they list financial advisors who are regulated by the relevant official bodies and are appropriately qualified, it is not a comprehensive list.  Advisors pay a listing fee to appear in the search results.

You can use the website to select the area you need advice in, give your contact details and wait for someone to get in touch. Be sure to check if they are independent or restricted in their advice.

It’s no surprise that I am a fan of sound independent financial advice.  I have seen the difference it can make to life goals, peace of mind and the bottom line.

Stephanie Bebbington-Dyke

Step 3: Who do they work with? 

Does the IFA work with all clients, or do they have a sector that they specialise in? Some advisors cater to a specific sector such as medical professionals, teachers, farmers to name a few. Others are specialised in working with clients who have a certain level of wealth. 

Ask who they work with and examples of how they’ve helped clients in a similar position to yourself. Enquire what experience they have in dealing with clients with the amount of wealth you wish to discuss. 

Step 4: What are the charges? 

An IFA can charge in several different ways based on the work you ask them to do. The most common fee types are paying a fixed or hourly rate, charging a percentage against the value of your investable assets, or receiving commission in respect of insurance contracts. 

The fee will take account of the complexity, regulatory responsibility, scope of work, amount to be invested and the type and number of products implemented e.g. pensions, investments, ISAs etc.

Before agreeing to proceed, ask for a written quote together with an illustration of their costs, based on the size of your investment.  Regulated firms should always provide this. 

Step 5: Are they qualified?

As a minimum, IFAs should hold a Level 4 FCA recognised qualification and a Statement of Professional Standing (SPS). This is renewed annually, so don’t hesitate in asking to see if it is up to date. 

Many choose to take their studies beyond the basic, usually through a professional body.  The most common are the Chartered Institute of Securities and Investments (CISI) and the Personal Finance Society (PFS) which is a society of the Chartered Insurance Institute (CII).  Both have searchable member databases for a quick qualification check. 

A Chartered Fellow is the highest qualification that an advisor can obtain by undertaking many qualifications and demonstrating outstanding commitment to continuing professional development over a minimum number of years. Choosing a Chartered Fellow means you will have advice from an advisor at the top of their profession. 

It is worth noting that specialist qualifications are required to advise in certain areas.  For example, the CF9 Long term care qualification is required to discuss and advise on long term care issues.

And most importantly, financial services activities must be registered with the regulatory body.  The  Financial Conduct Authority (FCA) holds a register you can search to check whether the firm and/or individual you are considering is legitimate and has the permissions for the regulated activities/services you are looking for. 

Step 6: Setting your Expectations

Be clear on the contact and availability your IFA offers and how you will like this to take place: in person, remotely, letter or email. 

Most IFAs are happy to chat to clients whenever they have a query or concern, other firms will hold an annual review service which will involve a once-a-year health check on the investments you hold, but any other contact during the year may be chargeable.

Will they encourage you to bring a valued friend or solicitor for support, especially if you feel vulnerable at times of distress such as divorce, bereavement, or frailty? 

Ask for a copy of the service proposition and ask how your needs will be met throughout the year or agree terms on a bespoke service that is tailored to you. 

Step 7: Do you connect?

Ultimately, you will need to like and trust your IFA to work with them on such a personal level. Any IFA worth their weight, will offer a free initial meeting so you can get a feel as to how you would work with them, decide whether you feel comfortable talking to them and establish an understanding of how they will achieve the results you are looking for. 

It’s good to talk. So if you need advice or have any questions please get in touch.

Let's talk...


Found this useful ?

Please feel free to share this with your contacts and friends on social media.