Money Mistake 4 - Getting Poor Advice From A Poor Adviser
Other Mistakes: 1. Going Direct 2. Not Bartering 3. No Reviews 5. Investment Timing
Make sure you understand who your adviser represents and check out your adviser’s qualifications
Who does your adviser work for? You , themselves or their employer?
The majority of all complaints submitted to the Financial Ombudsman Service are made against the advice of large insurers, banks and building society staff.
Why is this?
Large insurance companies, banks and investment firms have huge overheads, large salary rolls and fleets of highly powered company cars. Who do you think pays for this? Where do you think the money comes from? High charged investments and products with commissions’ bias? Surely not.
Do you think this person, with huge targets to cover a salary; pension and a company car will offer you totally unbiased, high quality advice? Are they acting for you or the company they work for?
Take Advice From A Reputable, Smaller, Independent Financial Adviser.
Ideally, take advice from the owner of that business. It is in their interests to make sure that a good job is done for you. After all, you will tell your friends.
Is Your Adviser Qualified? The Qualifications Alphabet Soup
Go on, get your adviser's business card out and review their qualifications.
Some advisers have letters after their name that can look impressive. It is helpful to know what these letters mean. Not understanding qualifications may mean that you are receiving advice from a lower qualified adviser when you may prefer not to.
There is an alphabet soup of qualifications in the current banking, insurance and investment market and advisers entering your home or seeing you at work may appear quite plausible and professional.
When you then look at their business cards and see a long list of designatory letters after their names you may be forgiven for thinking that they are highly qualified.
Some Designatory Letters Mean Very Little
The problem is so great with advisers apparently able to use letters after their name just for passing the equivalent of an ‘O’ level or GCSE in finance that the industry regulator, the Financial Services Authority, is now looking at a single qualification standard and having only professionally qualified advisers and non-professional, general advisers.
For example, take a look at the two following adviser’s qualifications:
Who is the higher qualified? They both look impressive.
The difference is, one has the equivalent of a degree in financial planning and is entitled to be called a Chartered Financial Planner, and the other has passed only the basic qualifications. But which one is which? To help, use the following guide:
Lower Level Qualifications
The minimum levels of qualifications required to become a Financial Adviser. Equivalent to ‘A’ level standard.
Higher Level Qualifications
The highest levels of qualifications for Financial Advisers. Equivalent to Degree standard.
Qualification standard equivalents as set by the Learning Skills Council.
Remember, some so-called financial advisers will not even have achieved the basic ‘A’ level standard qualifications as yet and will still be ‘trainees’. Be careful who advises you.
ONLY TAKE ADVICE FROM SMALLER, INDEPENDENT AND DEGREE LEVEL QUALIFIED FINANCIAL ADVISERS. PREFERABLY THE OWNER.
The Other Four Money Mistakes ...