Getting financial advice
Managing money is not easy and for most of us there is a lot at
stake if we do not make the right decisions. We may also be
bombarded with information and advertising on financial matters,
which can make it even more difficult to reach decisions. Because
of this, it is quite common to ask for advice before making
decisions about our finances – for example about how to best manage
our money or which mortgage or pension to choose.
Step 1: What is financial advice?
Financial advice is given to us by trained, professional
advisers who are regulated by the Financial Services Authority
(FSA) (link opens in a new window). They combine their
knowledge and experience with the information that we give them
about our personal financial situation to recommend financial
products or a plan of action that they believe is right for us.
It is important not to confuse financial advice with
financial information.
We can pick up financial information from a range of places
including banks and building societies, other companies providing
financial services, newspapers and websites. The key differences
between this information and financial advice is that it does not
take into account our personal circumstances because it is designed
for a general audience, and we have to decide if what the
information is recommending is right for us. Even if someone asks
you a few questions about your personal circumstances so they can
give you targeted information, this still is not advice.
Step 2: Where can I get financial advice?
You get financial advice from different places and a lot of the
time where you choose to get it depends on what you are looking
for. For example, if you want advice about mortgages you might go
to a mortgage broker, while if you are interested in investing in
the stock market, a stockbroker could be the right option. People
also go to banks and building societies, insurance companies and
financial advisers for financial advice.
Step 3: How do I choose a financial adviser?
The points below may help you choose a financial adviser who is
right for you:
- Not all financial advisers cover all areas of finance, so it is
important to make sure one you choose covers the subjects you are
interested in
- Some advisers give advice on a range of subjects, for example
pension planning or tax, but do not recommend specific financial
products, so check this out in advance
- It is a good idea to find out what sort of experience and
qualifications a financial adviser has
- Find out what you pay for the advice and how your financial
adviser is paid. It is important to note that they are often paid
commission by a company for selling its financial products, for
example mortgages or insurance
- Make sure your adviser is regulated by the FSA.
Step 4: What do I do next?
Last updated: 8 June 2010
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