One of the most important considerations when choosing a financial planner, is to find one with access to the entire products of the market you're looking at. Broadly speaking, financial advisers can be set into three varieties; independent financial advisers, tied advisers and multi-tied advisers.
Independent financial advisers have access to the entire market as they are independent of any particular organisation.
Quite the opposite of independent advisers, tied advisers are effectively salespeople who work for one financial organisation, with the task of selling that company's products.
This type of adviser will present you with a limited selection of products from various organisations with which they are affiliated. This is somewhere between independent and tied; you'll get a wider range of products to choose from than with a tied adviser, but ultimately you're being presented with options that have the greatest reward for the adviser, and therefore you probably won't get the most suitable deal for you.
You should look to always use an independent adviser as it's important that you (and your adviser) has access to the whole market in order to make an informed decision as to what's available.
Finding the right adviser
Like with a lot of things, the internet is an invaluable tool for researching the adviser market. You may have a recommendation from a friend or family member, but a little research should soon reveal if the adviser is independent or affiliated.
Industry regulation means that any accredited advisers now have to provide you with mandatory documents before you commit to making a purchase based on their advice. The documents basically give you the low-down on everything about the product, and the contractual terms and conditions with the financial adviser.
Key Facts: The key facts document will detail the type of service being offered and will state whether the whole market, or a limited number of suppliers/products have been considered to arrive at the recommendation. This document will also state how you are to be charged for the financial advisers service; i.e. whether it's a flat fee, or commission based
Key Features: The key features is all about the selected product itself. On here you can expect to find details of the benefits and how they relate to the initial objectives, as well as a risk assessment of the product.
As with anything; don't sign until you understand it all! Don't be too embarrassed to repeatedly ask questions until it sinks in – ultimately it's not your job to be a financial expert, and that's why you're employing a specialist.
For more information on when it might be necessary to use an adviser please refer to our article When should you use a Financial Planner?