09 Oct 2012

Five Questions to ask your Financial Advisor

Five Questions to ask your Financial Advisor

The upcoming changes to the financial sector due to the FCA's Retail Distribution Review, will mean some changes to how your financial advisor works with you. Neil Aspinall, Independent financial Advisor, provides five questions you should be asking your advisor about the service they will be providing.

The upcoming changes to the financial sector due to the FCA's Retail Distribution Review, will mean some changes to how your financial advisor works with you. Neil Aspinall, Independent financial Advisor, provides five questions you should be asking your advisor about the service they will be providing.

After 31 December 2012, new rules come into force around the way you receive financial advice on investment products, such as pensions and ISAs.

We have been preparing for the new regulations over the past few years. The rules have been introduced by the Financial Conduct Authority (FCA) to ensure consumers fully understand the charges and process for receiving financial advice. There are three main changes: more transparent charges, higher qualifications for advisors and clearer distinctions between different types of advice. 

These aren’t radical changes. You’ve always paid for financial advice, either in the form of a fee or through commission from a product provider. But, from January 2013, advisors will have to explain the type of service they provide and agree with you how much they’ll charge you for advice, as well as how you’ll pay for it. The changes have been welcomed in the industry and at Aberdein Considine.

These changes will affect the way your financial advisor runs their business, and preparations should now be well underway.  Not all advisors are as prepared for these changes, as we are at Aberdein Considine. Therefore if you don’t already use us as your financial advisor, here are some useful questions to ask your existing provider.  These questions will help you find out how the service you receive may change after 31 December 2012. 

What to ask your Advisor

What type of advice do you plan to offer after 31 December 2012? 

Some advisors will continue to offer independent advice but there will also be some who decide to offer restricted advice, where they provide advice on a specific product range or area of personal finance. Others may offer a combination of independent and restricted advice.

We will be offering independent advice.

What qualifications do you have and are these at the level required under the new rules?

Many advisors already hold qualifications at the necessary level or above, but it’s worth checking these are in place and, if not, whether your advisor is planning to achieve them before the introduction of the new requirements.

All our advisors are fully qualified with one of our advisors holding the Chartered Financial Planner Status.

How do you keep your skills and knowledge up to date?

The new rules require advisors to undertake a minimum of 35 hours of continuing professional development a year. Some will already have a Statement of Professional Standing, which proves they have done this.

All our advisors will have the Statement of Professional Standing by the end of the year.

How will I pay for your services from 2013?

You and your advisor will need to agree charges for any advice you receive after 31 December 2012. You may also want to discuss how they will treat any ongoing commission they receive on products that you already have.

Our fees will remain the same as they are now.

Will your processes be changing? 

Changes could affect the level of advice you receive and how often you see or have contact with your advisor, so make sure they keep you informed of anything that will affect you. As these changes will affect the way your financial advisor runs their business, preparations should already be well underway. These questions will help you find out how the service you receive may change after 31 December 2012. 

Our process and service have been prepared for the changes for sometime now, so will remain unchanged. 

Neil Aspinall, Financial Advisor

Regulated by the Law Society of Scotland.  Authorised and Regulated by the Financial Conduct Authority.


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