With Financial Planning Week approaching on 24 November and the post Retail Distribution Review (RDR) world now firmly bedded in with advisers charging fees, Jacqueline Lockie Head of Training, Association of Investment Companies (AIC)has shared her tips on how investors can make sure they are getting value for money from their adviser.
With these adviser fees in mind Jacqueline Lockie, Head of Training, AIC said: “I think now that all clients know they are paying for advice, the question then becomes “How do I know I’m getting value from my adviser?” The answer isn’t necessarily as straightforward as you might think – there are a number of important questions investors ought to be asking.”
Value for money? Jacqueline Lockie’s top questions to ask your adviser:
1. Look at the fee structure – how much do you pay your adviser, and is it per hour, a flat fee per job, or a percentage of your assets that they manage?
2. If paying your adviser as a percentage of your assets, does that include all assets e.g. cash and other assets they don’t actively manage? How do you actually pay it?
3. Ask what savings have been made for you from your adviser’s financial planning – e.g. income tax or Capital Gains Tax.
4. Compare the performance of your funds over the last twelve months with sector averages, and ask your adviser for some perspective on this.
5. Contact with your adviser: How often, and in what form, should you make contact with your adviser? Can you just phone up out of the blue – what’s included in your fee?
6. How does the adviser show your progress towards your objectives? Do they compare last year’s plan with this year’s plan? How do they explain it all to you?
7. In meetings who does most of the talking? You or the adviser? A long term relationship is a balance but it should be the client saying how they feel and what they aspire to achieve and the adviser explaining how they are going to get you there.
8. What types of products do you currently recommend and why?
Private investors considering an adviser, or possibly changing their current adviser, can find more tips at the website of the IFP, using the booklet, ‘Questions to ask when choosing a financial planner’.
www.unbiased.co.uk/ is also a good port of call for investors looking for good quality financial advice in their area.