‘I want a financial adviser to sort out my pensions – how do I find a good one?’
Dear Becky,
I’ve been with my financial adviser for 20 years, who came to me through family members – but I would now like to find a new one as I have turned 50 and am increasingly focusing on my pensions.
The problem I am having is how to choose a financial adviser. Is word of mouth enough to go on?
David
Dear David,
Choosing a financial adviser is difficult, which is probably why, according to some 2021 research from LV=, the majority of people choose them based on word of mouth recommendations from friends and family. This is understandable – to use a trusted source when you are talking about finding someone to manage probably hundreds of thousands of your pounds – surely there’s no better way?
Except, if the person you are taking the recommendation from got it wrong, too.
The advent of comparison websites has pretty much passed by the financial adviser world, probably because they are objectively very difficult to compare on key factors such as quality of service, communication and charges. So, in the absence of a recommendation, it is hard to know where to look.
But there are options open to you. First off, as you are over 50, you can book a free Pension Wise appointment. This is the government guidance service, and it’s worth bothering with. You can get impartial advice on what to do with a defined contribution pension, which can help give you an idea of what you want to do as you near retirement.
Continuing your adviser hunt, a good next stop would be the website Unbiased. You can specify that you are looking for help with pensions, and you can also choose to search for someone who can advise on defined benefit pensions, if you have one of those. Unbiased then delivers a list of advisers who could be most suitable.
Another is VouchedFor, which relies on reviews. Reviews from strangers may even be a better bet than people you know; there’s a good critical mass of proper adviser reviews on this website, which might make up for the lack of personal recommendation.
Another website worth mentioning is Boring Money. It’s a customer reviews-led site with a “Find An Adviser” page, and possibly the closest thing you will find to a comparison site for advisers. The five-star rated advisers are on the first page. However, it appears that some advisers are more active at building their profile than others, so it’s difficult to know whether those without any reviews or likes have simply not solicited them – I suspect this is the case.
Nevertheless, it’s a handy finder with a good amount of information about each adviser, their qualifications and their focus. There also seems to be a higher proportion of female advisers on this website than others.
There are other directories. The Government’s Money Helper website has a retirement adviser directory, as does the Personal Finance Society and the Society of Later Life Advisers.
It’s also worth reading The Telegraph’s own guide on choosing a financial adviser – which also has information on how much advice might cost, the different types of advisers, and what to do if you’re unlucky enough to get bad advice.
Most of these IFA search websites narrow down your list of options by your location first, assuming you want to find someone who is based near you. Personally, I’d be happy to do Zoom calls with an adviser. If they were the best, I wouldn’t much care where they lived.
There are other options besides traditional financial advice, especially if you don’t think your finances justify deep knowledge. There are robo advice platforms, which promise advice and investment management for a lower cost, albeit with less of a personal touch. Then there’s the option to go it alone entirely, managing your investments yourself. This might not be for everyone – but it also might not be as hard as you think.
If you definitely do want to stick with a traditional IFA relationship, then after a bit of research on the above sites, you’ll probably want to narrow it down to a final three. Initial meetings are usually free of charge. If you have the time, take an hour with each before making up your mind.
One final thought – it’s an under-used perk but there is something called the Pension Advice Allowance you may want to use. This allows individuals to take £500 out of a pension tax-free to put towards advice. You can only do this once in a tax year, and only up to a maximum of three times in total.
