If you are looking for financial advice and you are using the internet to find your adviser, you are of course, not alone..
Consumer perception currently seems to be that most people will be able to find, not only the most qualified and experienced financial advisors, but, ALL financial advisers on aggregator websites. This is not the case.
Here’s how aggregator websites work
Aggregator sites need advisers to buy into their service and in turn charge the adviser a monthly subscription fee for being listed on the site. The consumer then submits an enquiry to the aggregator site and a message is typically sent to several advisers.
Unless it is a direct enquiry, it is then a case of speed, whereby, the adviser who accepts the ‘lead’ first will be able to buy that lead, at a cost of between £30 to £350, depending on the type of enquiry.
Why are these sites flawed?
Firstly, a sample of the advisory community subscribes to these sites, so, if as a consumer you rely on one of these sites, without doing further research, you will only be viewing a % sample of advisers in the marketplace who have a working relationship with those aggregators and who pay for their services.
Ultimately, it will be the adviser who has the fastest server speed and/or who is prepared to pay for these enquiries, who will respond to you.
The reviews on these sites are often difficult to differentiate, where, most advisers seem to have similar top reviews. And these sites all purport to have a robust process for how adviser reviews are posted.
This system relies on those advisers who are prepared to ‘pay for leads’ which does not equate to quality, or a level playing field.
In fact, it is important to note that, the more an adviser pays the higher up they will be on the sites search results. This is not an independent, unbiased or meritocratic way to do things and does not give the consumer immediate access to the best adviser for them.
To put this into context, in the lead up to 2008, the credit ratings agencies: Moodys and S&P, etc. who had been paid handsomely by banks and corporates to rate banks and corporates, where shamed by global regulators for operating as such and a complete industry overhaul ensued.
Aggregator sites also give out ‘awards’, as did ratings agencies (!), to advisers who have used their service extensively, which in turn then acts as a marketing tool for promoting both the adviser and the aggregator site. Again, this is not meritocratic and does not provide consumers with the search results they might be hoping for.
How to find the most suitable Financial Adviser for you
The bottom line is that, finding a good Financial Adviser requires due diligence; If you are serious about growing and protecting your wealth for the benefit or yourself and your family, then putting time in to finding the best Financial Adviser for you should be a priority.
Here’s some things you might consider when starting your diligence process:
- It is wise to look at an adviser’s own website to see how much effort they have put into portraying themselves, this is essentially their shop window.
- Check Google and Yell reviews.
- Ask the adviser to put you in contact with an existing client who can talk to you about their experiences across different planning areas.
- Shortlist and go to see three Chartered Financial Advisers, and compare what they tell you.
- Cost is not everything, value for money is; If the fees seem ‘cheap’ relative to the competition, ask yourself why? How do they sustain a healthy business? What kind of service will they provide you with? Will it be good value for money or will you need to change adviser in a few years and incur initial charges all over again?
- Check qualifications: Only shortlist Chartered Advisers, as they should know their subject matter as evidenced by their qualifications and experience. For example, if you are looking for pension or investment advice, ask if the adviser has first-hand experience of working in the financial markets, i.e, in an investment bank, hedge fund or other wholesale financial institution preferably in asset management. Having experience in retail banking is not going to make someone a financial markets expert.
- Things to ask are, what makes the adviser/s and the firm unique? Why are they best suited to work with you? Ask yourself, if you and your family can work with the adviser in the long term? Statistically, most advisers are going to retire within the next decade, so, if your adviser is one of these people, then you may need to find someone new at some point, at which point you might then incur initial costs all over again!
- Does the adviser provide joined up holistic advice across all areas of financial planning, accountancy and legal? If not, then they will undoubtedly miss things out of your financial plan, possibly leaving you at a disadvantage.
Don’t be fooled by aggregator site claims that the advisers they list are the only ones in the market place. Some advisers choose not to subscribe and some do.
Simply by doing some thorough due diligence, you could end up making a much better financial decision for you and your family, in the long term, helping you to grow and protect assets for you and your family and possibly for generations to come.