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Is your financial adviser ready for life in 2013?


Duncan Parkes, Director and Chartered


Financial Planner of the year 2012


By now many of you will have heard about some changes that are taking place in the financial services sector in 2013, but what do they all mean?


The Financial Services Authority has, for some time, been working on the ‘Retail Distribution Review’ which put simply, will see the implementation of three key changes to the way you receive financial advice.


What is changing?


nClearer charges – instead of being paid by commission through a product, advisers will have to agree their fees with you in advance of any advice being given.


nClearer services – your adviser must disclose whether they are able to advise on all available options or only specific areas


nMore professional advice – your adviser will have to meet higher standards of qualification, ensure their knowledge is maintained and sign up to a code of ethics requiring them to treat you fairly.


How do you know if your adviser has made the necessary changes?


I have listed below some questions that you may like to ask your adviser to ensure they continue to meet their ongoing obligations.


1) What experience do you have as an adviser?


Find out how long the adviser has been in practice and the number and types of companies they have been associated with. Check that they also have experience in dealing with clients of a similar financial make up to yourself.


2) What are your qualifications as an adviser?


Your adviser should by now have reached, as a minimum, QCA Level 4 which in the UK usually means having a Diploma in Financial Planning from either the Personal Finance Society or Institute of Financial Services.


If your adviser holds either Chartered or Certified status this sets them out from the crowd as going that extra mile to improve their technical knowledge. It is also worth checking what steps your adviser takes to stay up to date with changes and developments in the financial planning field.


3) What services do you offer?


Not all advisers will be authorised to advise on all areas of financial planning. Some may be restricted in their choice of products and/or providers and some may be restricted in the scope of their advice.


There are, for example, specific qualifications required to advise on some types of pension transfers and long term care. It is therefore vital that you check your adviser has the ability to advise on the areas you require advice on.


4) How much do you typically charge?


Your adviser should by now have a clearly defined fee structure which explains how they intend to charge clients from January 2013. Ask to see a copy.


5) How will I pay for your services?


Your adviser’s fee structure document should include an explanation as to the options available to pay for their services. These are generally by way of a direct fee or via a payment from the respective investment or pension. Remember this should be your choice and your adviser should be able to accommodate your wishes.


6) Can I have a copy of your Code of Ethics?


Each adviser should have a Code of Ethics which details their responsibilities to you the client. Ask to see a copy. Any adviser who is fully prepared for the forthcoming changes should be able to answer these questions with ease and have documentation to back up their comments.


Old Mill has been developing its service proposition over the last four years and already meets all of the requirements to remain at the forefront of financial planning in 2013. If your existing adviser cannot answer the above or you would like to discuss any aspect of this article please contact us.


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