Article by Phil
How to find a financial advisor
Are you wondering how to find a financial advisor? If you are reading this on our website, you might be.
There are obviously many ways in which financial advisors try to engage with potential new clients. But according to a survey by Investec the main ways are as follows:
- Recommendation by a family member – 22%
- Through work – 21%
- By doing your own research – 21%
- Through your Bank or other financial services company – 16%
- Recommendation by a friend – 15%
Looking at each of these, how do we fare and compare in terms of helping you to find a financial advisor. Recommendations either by family or friends account for over 33% of our new client introductions, so higher than the survey found. Introductions through research account for the other two thirds. That’s people finding us through google searches or Vouched For. We rely on our website to support these kind of introductions, by letting people see our client testimonials, but also looking at our Google Reviews and Vouched For reviews.
We do get introductions through the workplace, but that is usually employees recommending us to other employees. We don’t act as financial advisors for any specific companies. But some bigger employers do use national advice firms to provide their employees with an advice service. Sometimes employers make a contribution to the advice fees as well.
We don’t get any introductions through banks of course. They only use their own tied advisers who don’t provide independent financial advice.
Interestingly there is no specific mention of social media helping people to find a financial advisor in the survey results. It may be caught in the “doing your own research” pot, but it doesn’t seem to be that important when looking for an advisor. Where social media comes in is for those people not using a financial adviser but making their own DIY investment decisions. 95% of people questioned in a recent Ortec Finance survey said that they were influenced by social media when it came to making decisions about stock market investments. That’s scary.
According to Hargreaves Lansdown 25% of young people under the age of 30 now take their investment advice from Tik Tok. But only 1% of over 55’s say they use social media as the main source of their advice and information.
Can you find a financial advisor.
Whilst the way in which people find a financial advisor varies, the bad news is that the number of people using a financial advisor is down again. According to research by Lang Cat the number of people taking advice is down to only 9% from 11% just over a year ago. Even those who do have a financial adviser are concerned about them retiring. According to Investec 46% of people said they were concerned that their adviser was going to retire in the next two years. If they did, 60% of people would stick with the advice firms, whilst 30% would look for another adviser and 10% said they would not use another adviser at all.
It seems that price continues to be major factor in whether you can find a financial advisor. Many advice firms are now only accepting new clients who have a minimum level of wealth to invest.
We don’t have a minimum level of investment, but there is always a point where the fees for advice will outweigh the value of paying for advice.
When thinking about whether an adviser might be able to help, you might want to think about whether you will be protected. The answer is yes via the Financial Ombudsman Service (FOS) and the Financial Services Compensation Scheme (FSCS). Last year FOS saw the number of complaints rise to almost 200,000. Of these 1,400 were about SIPP’s and just over 1,000 about pension transfers out of overall total. So just over 1%. The majority of complaints are about Claims management Companies, Banks, Credit Cards and of course scams.
Only 300 people complained about the investment advice they received from their financial advisor. An incredibly low number for the whole of the UK.
