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What is a financial adviser and what do they do?

4 mins read
by Unbiased Team
Last updated Tuesday, February 27, 2024

Financial advisers can help you save for your goals and help improve your financial circumstances. Discover more about what a financial adviser is and what they do.

Managing your finances can be tricky.

There are many specialist terms to get to grips with, and with so many different ways of saving, budgeting and investing, it’s hard to know how best to plan for your future.  

That’s where financial advisers come in.

They can help you manage your money and achieve your financial goals.

This article takes a closer look at what financial advisers are and how they can help you.  

What is a financial adviser?

Financial advisers are independent specialists who are experienced and knowledgeable in managing money.

They are well-qualified and can help you do everything from optimising your pensions to improving your credit score.  

A financial adviser offers you impartial advice on a range of different topics.

However, you will find that some advisers can only advise you on a select number of products and services.

This is the difference between an independent financial adviser (IFA) and a restricted adviser.  

While the former can recommend services and products from a wide range of providers, the latter can only offer you services from a limited range.

A restricted adviser should always be able to explain why this is, so you’re always getting advice tailored to you.  

Depending on the type of adviser you choose, they may offer you an advised or non-advised sale.

An advised sale is where an adviser lists a policy, explains it and then details why it is the best option for you.

A non-advised sale is when an adviser explains a policy but leaves it up to you to decide.  

What services does a financial adviser offer?

When it comes to big life events such as retirement, saving and mortgages, it’s hard to know how best to plan and how these changes will impact your finances.

So, it can be a good idea to speak to an adviser if you’re looking for advice on things like: 

  • Annuities 

  • Pensions and pension transfers 

  • Tax and estate planning 

  • Mortgages 

  • Investing 

  • Saving and budgeting  

But financial advisers can do more than recommend policies and plans.

A good adviser will also help educate you about managing money.

Managing money can be complex, but with the right adviser, you can start to understand some of the more complex aspects of your finances.   

What are financial adviser fees?

Financial advisers usually charge for their services in one of three ways: an hourly, flat or commission-based fee.  

Usually, your first meeting is free, as this is where you and your adviser will ask each other questions, and the adviser will determine how they can help.

If you decide to move forward with an adviser, this is when you agree on a price.  

If an adviser charges an hourly fee, ensure you’re asking for a breakdown of all the work done and how long it took.

Advisers charging a flat fee are usually doing so to help you carry out a one-time project. This could be consolidating pensions or investing, usually not needing long-term support.  

Some advisers may instead prefer a percentage-based fee, which is usually based on a percentage of the money you ask for advice on.  

Are there scenarios where I legally need a financial adviser?

There are no situations where having a financial adviser is a legal requirement.

Instead, it’s simply good practice – especially when making big life decisions that will impact your financial future.  

After a long time spent saving and managing your money, the last thing you want is to incur taxes and fees that might affect your plans accidentally.  

What questions should I ask myself when seeking financial advice?

If you’re searching for an adviser, it’s worth asking yourself a few questions: 

  • Are you planning for a specific goal? Whether you’re looking to save for a mortgage or plan your retirement, deciding on a fixed goal can help you focus your efforts. 

  • How much risk are you willing to take on? When making investments, you must determine how much risk you are willing to take to pursue your goals.  

  • Are you looking for advice or information? Some advisers will offer you both – but not all. Make sure to ask any prospective adviser about the different ways that they can help. 

  • Are you looking for one-off advice or ongoing support? Many financial advisers work with clients over a long period of time – however, this can be a more expensive option.  

What can I do if you’re unhappy with the advice?

If you aren’t happy with the financial advice you received, you should gather documents that show how you were misadvised and write to your adviser’s firm.  

Alternatively, you can freely contact the Financial Ombudsman Service, which can help award any compensation owed.

This service is free, so you don’t have to pay to recoup any lost funds.

Learn more: what to consider when switching financial advisers

How can I find the right adviser for me?

Finding the right adviser can be tricky.

While many advisers will be happy to advise you on a wide range of topics, many have specialisms that may or may not suit your needs.

Before engaging anyone’s services, find out their areas of expertise and whether they align with your goals.  

With the help of Unbiased, finding the right adviser can be even easier.

There are thousands of dedicated IFAs on our platform who can help you reach your financial goals – whatever they are.

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Unbiased Team
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.