How an IFA works

An adviser will research and compare the products provided by different and competing companies on your behalf and will suggest those that they believe best suit your needs, your current situation and future plans.

Financial advisers normally provide advice on a number of financial planning areas, including:

• Regular savings and investments
• Lump sum savings and investments
• Mortgages and protection
• Pensions

What can you expect from your initial meeting with your adviser?

It will usually take no more than one hour and will either be held at the adviser's office or in your home. The adviser will provide you with an IDD (Initial Disclosure Document) explaining what type of advice they offer, who they work for and their charges for providing advice, as well as a Menu, which is a guide to the cost of services provided on certain retail products by the market in general.

The factfind

In order to provide the best advice, your adviser will need to know a lot about you and may ask questions concerning your personal and your financial situation and your attitude towards risk. All of this information and more will be entered onto a factfind.

Your adviser will want to know what you want to achieve financially, and using all of the information he or she has collected, will be able to formulate a strategy for you. Depending on the advice required, it is usual for your adviser to go away and research the market for suitable products to meet your financial goals. A second meeting is normally held where your adviser will go through all of his or her recommendations with you. It is then up to you to decide whether you wish to accept these recommendations and proceed.

How are financial advisers regulated in the UK?

Advisers have to follow strict rules and are authorised and regulated by the Financial Services Authority (FSA). The Financial Services and Markets Act (FSMA) took effect from 2001, and the Financial Services Authority (FSA) became a single statutory regulator for the financial services industry including banks, building societies, mortgages, investment and insurance companies and financial advisers. The FSA has four statutory objectives:

• market confidence: maintaining confidence in the financial system;
• public awareness: promoting public understanding of the financial system;
• consumer protection: securing the appropriate degree of protection for consumers;
• and the reduction of financial crime: reducing the extent to which it is possible for a business to be used for a purpose connected with financial crime.