Category 7

1 – I’m looking for an IFA to help us manage our financial planning when we retire. How can I find an IFA and what questions should I be asking?

Finding an IFA who can help you with your financial planning can be challenging, but it is worth investing some time and effort to find an adviser who you feel comfortable working with. A good place to find an IFA is by asking friends, family and colleagues if they have any personal recommendations. Alternatively, the Internet is a good place to look with several adviser search engines available where you can locate a local IFA firm.

At the first meeting, you should ask plenty of questions to determine whether or not this adviser is the right person for you. Firstly, find out if they are independent. An independent financial adviser will act on your behalf and has access to products from the whole of the market. Other types of adviser – such as multi-tied or tied financial advisers – may claim to source the ‘best’ products, but the only way to guarantee this is to choose an IFA.

You should find out how long they have been an adviser and what qualifications they hold. A combination of experience and qualifications is important to ensure you get the most suitable advice. The minimum qualification requirement for financial advisers is the Certificate in Financial Planning. This is a very basic qualification and you should always seek an IFA who is qualified to at least Diploma standard, or preferably higher. The most qualified advisers are Certified Financial Planners and Chartered Financial Planners.

Ask the adviser how they charge for their services. IFAs either receive commissions in return for selling you a financial product or they charge you an explicit fee for their professional services. The only way to guarantee impartial and unbiased advice is to pay a fee. This should be agreed before the IFA does any work for you and any commission generated is then used to offset the commission or reduce product charges.

Always find out what ongoing services the IFA will provide. You may or may not want to receive ongoing advice, but this requirement should be clearly established at the start of the relationship, particularly if the adviser will be receiving any ongoing remuneration in respect of your investments.

Remember that an IFA is not for life, so if you are unhappy with your current adviser you can easily change to a new IFA.

Martin Bamford is Joint Managing Director of award-winning Independent Financial Adviser (IFA) firm Informed Choice Ltd (www.informedchoice.ltd.uk).

He is also author of best selling personal finance guide, The Money Tree (£9.99, Prentice Hall Business). His second book, Brilliant Investing, will be published in November 2007 (£12.99, Prentice Hall). This article is provided for general consideration only and the information contained herein is not to be acted upon without professional independent financial advice.