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The best questions to ask your financial adviser

When finding a financial adviser, especially outside the UK, it’s easy to get bewildered and accept what you’re told.

Unbiased-listed Montfort International has developed its own definitive guide to the questions you should be asking your financial adviser.

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Why financial advice you can trust is vital

Firstly, finding a financial adviser you can trust is a real challenge.

After all, you’re putting both your hard-earned wealth and future plans in their care. And if you’re seeking an international financial adviser, the task can become even more daunting.

Whoever you are and wherever you may be, you’ll face the same sorts of issues when it comes to planning for the future.

You may want to help your children get the best start into adulthood or the best return from your pension, or you may want to leave a good legacy for your loved ones.

Much of how you achieve this comes down to planning – but an equally big factor can be the difference in regulation and products that each country has to offer.

If you’re considering a move overseas, you may have plenty of questions that you think need to be asked.

But how will you know if the answers you are given are the ones you want? And can you depend on them to safeguard your future wealth?

International advice can be a particularly tricky area, but Montfort International has some handy insights into what to expect. 

Your guide to ‘great, good and bad’ answers

Geraint Davies, Montfort’s managing director, urges prospective clients to be bold in asking questions.

"There is always a need to ask the right kind of questions when dealing with your finances," says Davies.

"It’s important that financial advisers have the ability to answer these questions.

"Certainly, they shouldn’t be afraid to show qualifications, experience and how well the company they work for is doing.

The guide is not designed to answer questions in detail but grades some typical answers as ‘great’, ‘good’ or ‘bad’ and explains the reason for each verdict.

In this way, it can help someone who is new to advice to develop a keen eye for a good adviser.

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The best questions to ask your financial adviser

Let's dive in and take a look at some sample questions and answers.

How do you get paid for providing advice?

Reason: You are receiving a service which is going to cost you money, so of course, you need to know how much. Also, remember that nobody works for nothing, so if an adviser’s service appears to be free, you need to know how they are earning their income.

Great answer: Here is a full breakdown of our fees, illustrated both in percentages and monetary terms.

Bad answer: You do not need to pay me anything as I get paid from the investments I place for you.

Davies says: "Keep in mind: if they say they are paid from the investments you make, you have to be aware that ultimately it is still you paying for it.

"You need to dig deeper to understand how they are paid by the investments or products, and how much.

"If they are evasive or broad in their answers, it should ring alarm bells."

How risky are the investments you’re recommending?

Reason: You want to understand how much risk you are taking with your money. You need to ask yourself whether you are comfortable to take this risk or not.

Great answer: I will need to do some risk-related fact-finding with you and assess your appetite for risk, your capacity (i.e. ability) to take risk, and the length of time you can invest these funds. I can then discuss the types of investment that would suit your circumstances.

Bad answer: You have to expect fund values to rise and fall. You have to take risks to get returns.

What experience do you have advising people in my situation?

Reason: You want to make sure this is not the first time they are dealing with someone in your situation.

Great answer: Yes, I deal with this on a daily basis and have evidence I can show you.

Good answer: Yes, I have dealt with similar cases – here are some examples.

Bad answer: No, this is my first case. (Or: Yes, I have dealt with similar cases, but can’t give you examples!)

Bear in mind that an adviser can only really answer this question once they have learned a certain amount about you as an individual.

How am I protected if things go wrong?

Reason: You want to make sure you are protected if the investments were misleading (or a complete scam, meaning you have lost everything).

The best advice you can receive is from an adviser in a regulated jurisdiction where there are appropriate powers to provide compensation. Make sure you know the jurisdiction that would cover any complaint.

Great answer: I have professional indemnity insurance, governed by local laws and regulated in our jurisdiction.

Bad answer: There are no regulators or protection schemes in this country.

How can a financial adviser help me?

Whether you're looking to save for the future or buy your first home, it’s always recommended to seek financial advice first.  

Unbiased has 27,000 independent financial professionals across the country.  

Let us match you to your perfect financial adviser today.

Get financial advice
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About the author
Our team of writers, who have decades of experience writing about personal finance, including investing, retirement and pensions, are here to help you find out what you must know about life’s biggest financial decisions.