Get Everything In Writing

An adviser must usually ask you to sign a 'client agreement' setting out the terms of the contract between you. Unfortunately, this requirement doesn't apply where the adviser is selling you just life insurance, unit trusts or pensions. The salient points of the agreement may be set out in terms of a business letter, but if they are not, or if there are additional points which you think should be noted, keep your own record of what was discussed and agreed.

Whether or not there's a client agreement, it's a good idea to keep a note of the time, date, person you spoke to, and content of any telephone conversations and meetings. Confirm in writing if possible (keeping a copy for yourself). These notes could be vital if you have a dispute with the adviser.

Be careful with cheques

Once upon a time, the unscrupulous adviser could happily mix clients' money with his own, often making it impossible to untangle who owned what if the adviser went bust. Under the Financial Services Act, advisers who are allowed to accept client money (many are not) must keep it in a separate client account - though this can be one account for all clients, not one for each, so ownership could still be disputed.

But unless the adviser is taking investment decisions for you (as with a `discretionary management' service), there's usually no need for you to hand money to him at all. Instead, make cheques payable to the company providing the investment - be insistent, if necessary. This may seem inconvenient if you are investing in several different companies at one time, as you'll need to make out several cheques, but doing so will reduce the likelihood of a fraudulent adviser diverting your funds into his own pocket.


Check The Cost of Advice

Check how the adviser is to be paid. Some charge fees, which might be based on how much time the adviser spends on your case, or on the amount of money you have to invest. Stockbrokers will charge you commission on the value of the shares you are buying or selling. An insurance company representative can be paid in some or all of the following ways - salary, fringe benefits, commissions, bonuses. But the vast majority of independent advisers are paid largely through commissions from the companies whose products they sell - though some, including solicitors and accountants, are paid wholly or partly... see: Check The Cost of Advice


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