More On Financial Advisers

As a minimum, an adviser will need information about all the following areas in order to give you sound advice: your age and health, whether you're married, single, separated or divorced, the number and ages of any children and any other dependants, the size and make-up of the family's income, possible changes in your financial circumstances, your regular financial commitments, your tax position, your home and mortgage, your existing insurance, pension arrangements and investments, if any, your investment aims, how much you have to invest, how much access you want to your money, and what risk you can take.

Check the advisers' credentials

Although most people in the financial services business are honest and competent the Financial Services Act 1986 was designed to shut the door on the minority which fall into neither category. Under the Act, it is a criminal offence for any investment business (whether it's a provider of investments or a giver of advice) to operate without authorisation. An investment business must be authorised by a Self Regulating Organisation (SRO) or by the overall regulating body - the Securities and Investments Board (SIB). There are five sR0s:

- the Financial Intermediaries, Managers and Brokers Regulatory Association (FIMBRA) covers investment intermediaries who advise on or manage investments for individuals

- the Life Assurance and Unit Trust Regulatory Organisation (L A U TR covers insurance companies, unit trusts and friendly societies and is concerned mainly with the selling and marketing of their products

- The Securities Association (T S A) is made up of members of the Stock Exchange plus dealers in some other stocks, bonds and so on

- the Investment Management Regulatory Organisation (I M R consists of corporate fund managers and advisers, such as pension fund managers and unit trust managers, plus some banks

- the Association of Futures Brokers and Dealers (A FBD) is made up of investment businesses involved with futures and options.

Members of certain professions, such as solicitors and accountants, which give investment advice as a side line to their main business can be authorised by a Recognised Professional Body (RPB). But if their investment business is substantial, they will have to be authorised through an SRO.


Getting The Best From A Financial Adviser

Do your homework

Unfortunately, using an adviser doesn't absolve you from all the hard work - if you're to get the best from an adviser you need to have a clear idea of what your financial aims are:

- what sort of advice do you need? Perhaps a one-off assessment of your investment position, if, say, you've just come into a lump sum through inheritance, redundancy or retirement. Maybe you need regular investment advice, even someone to take over the m>- what are your investment aims? Do you want income or capital growth? How much can you invest - on a regular basis, or as a lump... see: Getting The Best From A Financial Adviser


More money