According to the figures, there were an estimated 27,557 licensed financial advisors in the UK as of 2019, with this number up 3% year-on-year and 8% since 2016.
This highlights the incremental growth in this sector and the rising demand that underpins it, as households nationwide continue to struggle with sluggish wage growth and a rate of inflation that’s projected to peak at 4% by the end of 2021.
However, such market growth may also attract rogue operators and advisors, so it’s important to understand the key criteria for identifying reputable options. We’ve outlined some of these below:
#1. Is Your Advisor Registered with the FCA?
Let’s start with the basics; as no matter how glossy or professional a financial advisor’s website looks, a reputable service provider must be registered and accredited by the Financial Conduct Authority (FCA).
Similarly, the best advisors should have a Level 4 or above National Qualifications and Credit Framework accreditation, alongside at least 35 hours of professional training through the Statement of Professional Standings (SPS).
Ultimately, this information should be available both online and through the company’s website, otherwise, you should refrain from dealing with the advisor or sharing potentially sensitive personal data.
#2. Do your research and value transparency
Even if you prioritise FCA approved and accredited advisors, this will still create a significant shortlist of service providers from which to choose.
So, you’ll need to commit to a period of research during which you compare the market in greater detail, paying attention to an advisor’s qualifications, history and breadth of experience. You want to be sure that the adviser has adequate experience in financial planning.
They should also be open and willing to share any additional information that you request, with transparency a key consideration whether you’re evaluating a service provider or discussing the fees that you’re likely to be charged.
#3. Look for testimonials
Another important check involves client testimonials, which may be published on the advisor’s own website or independent review sites such as Trustpilot.
This enables you to access first-hand reviews of the previous and existing clients associated with the advisor in question, which is often more insightful than any landing page or sales copy on a website.
This can help you to make an informed decision and one that’s based on a myriad of diverse and important factors.
On a final note, we’d also recommend that you adopt a proactive approach as a potential client and take steps to safeguard yourself if you receive bad or inappropriate advice.
In such an instance, for example, you need to liaise with a professional negligence solicitor, in order to pursue a claim and chase compensation as a way of recouping any capital that may have been lost.
This won’t be necessary in most instances, of course, but it’s always better to be prepared and ready to take action if you do receive bad advice.