Let’s be honest, financial advisers are not held in great esteem. Mis-selling and opaque charging structures have quite rightly led to widespread mistrust of the financial services industry. My own dealings with an adviser 20 years ago left me in no doubt that the advice offered was not serving my best interests. That is why, when I left my job as a commercial helicopter pilot, I decided to retrain as a financial adviser and establish my own firm.
So, has the industry reformed itself since my negative experience in the late 90’s ? Well, the intention has certainly been there. The Financial Conduct Authority (FCA) introduced the Treating Customers Fairly initiative and moved to principles based regulation. Since 2013, commission-based charging for pension and investment products is no longer permitted. As in any industry, there are many that apply the rules in the spirit they were intended, some that interpret the rules to their own ends, and a few that ignore the rules. Unfortunately, the task of differentiating the good firms from the poor ones falls on you as the customer. However, you could be missing out on potential gains by maintaining a belief about financial advisers that is no longer justified.
Are you guaranteed to increase your wealth by employing a financial adviser? Of course not. However, you should significantly increase the chances of meeting your financial objectives. An adviser does this by determining the minimum level of risk that you need to take and are willing to take, with consideration given to your ability to withstand financial loss.
So should everyone should employ a financial adviser? Well no, because clearly there are occasions where product and advice charges can outweigh the benefit provided by the advice. However, before charging you a penny, a good adviser will assess your situation and determine if it is in your best interest to take advice. With this in mind, why would you not use a financial adviser?