Finding the right Financial Advisor

First of all, it’s important to establish the difference between a Financial Advisor and an Independent Financial Advisor (IFA). What makes an IFA different is that they are independent – that means they aren’t acting on behalf of any particular product provider or any other body. They usually work for themselves, acting on behalf of you, the client alone. This badge of independence is important because it means that the advice they give you must be impartial.

An IFA’s role is simply to help you reach your financial goals. They do this by looking at your financial circumstances and building up a picture of what you want your finances to look like in the future. In the process they will take into account all aspects of your financial situation as well as looking at how you can make your finances more tax-efficient.

An IFA will spot the areas in your personal finances where improvements could be made in order to help you reach where you want to be financially now and in the future.

The Golden Rule.

“If you’re using an adviser, always, always, always ensure it is an Independent Financial Advisor (IFA)”

If you’re going to get professional advice, always check it’s from an Independent Financial Advisor, as the IFA will look at products from the entire market; unlike tied or multi-tied advisors who can only sell/advise from a limited range of companies. There is a legal distinction so ask them, Are you an Independent Financial Advisor? Don’t accept any hedged answers.

The writers of this article are Independent Financial Advisers and as such are writing for the paper and you as opposed to a particular product or investment company.

While it’s not foolproof the best way to ensure sound financial advice is to ask the following questions, which should help you find a reputable IFA.

Questions to ask a potential Financial Adviser: –

How long have you been established?

In the UK when looking for an IFA company, one would recommend that it has been established at least three years, however in the TRNC I would go to five years. It is important that those looking after your financial needs are here to stay and will not be moving on.

Are you authorised?

This is difficult in the TRNC because there isn’t a Regulatory Body at present. All companies need to be registered and known by the Central Bank but sadly this is where it ends. A reputable company will self regulate to the EU standards, this will be seen in how they conduct business and themselves. A reputable IFA will gather the full facts and record your financial situation, advice will be given in writing and you will be issued with a terms of business (TOB). The advisors will hold the relevant professional qualifications.

What qualifications do you have?

There is NO requirement in the TRNC for a financial advisor to be qualified but a reputable company will want to make sure their advisors are fully qualified to the EU standard and  maintain the knowledge that they need to give solid advice. Therefore, an important question to ask is: what qualifications do you have and how do you keep these up dated? This is known within the business as Continued Professional Development (CPD).

Can I see your Terms of Business documents?

Ask to take a look at their ‘Terms of Business’ document, which will set out how they will work for you explain their charges and confirm that they are truly independent.

What experience and knowledge do you have of the TRNC and offshore investments?

There are very good advisers in the UK and other jurisdictions but when it comes to helping clients in the TRNC they are lacking because they do not have the local knowledge or expertise to make sure they get the best for a client.

Do you hold client money?

You should not give money directly to a financial adviser; IFA’s do not hold client money. This is very important and safeguards against theft or fraud!

How many advisers do you have?

A one man band may offer you a personal service but problems can arise in the event of illness or relocation.  If the firm is bigger than just one or two advisers then these problems will not be an issue. Firms with a group of advisers often have a greater level of technical expertise with ideas and training being shared.

I believe the above will clear up any uncertainties about selecting an IFA. Astute FMA are Independent Financial Advisors established here in the TRNC in 2006. Astute FMA is steadily growing and expanding within the local community, we now have five fully qualified financial advisers and a team of ten employees looking after our client’s needs. Astute FMA are conveniently positioned in the heart of Girne thus making it easier to help you and the local Expat community.

Each week in the Astute Angle I will cover various financial topics that may affect life and living in the TRNC, therefore if you have any financial questions or queries drop me a line, I will endeavour to answer your queries.

Your Comment:

Related Posts