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How to choose a Financial Adviser


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Steve Rodgers is International Financial Planning Adviser with Blacktower Financial Management Group.

THINKING OF giving your finances a makeover but don’t know where to start? There are a number of reasons why people first turn to a financial adviser for help.

You may be looking for the best way to save for retirement, a mortgage, advice on how to invest for the future or to provide a tax efficient income. Whatever your motivation for seeking it, getting quality unbiased financial advice is not as simple as it sounds; being forewarned is forearmed.

In the UK, if you need investment, pension or inheritance planning, you would often contact an Independent Financial Adviser. Since these issues are even more important to someone who is starting a new life in a new country, it is common sense that you would do the same. But how do you choose a financial adviser?

Obviously, some of the most important criteria for choosing a financial adviser in Portugal will remain the same as in the UK. You must get on with them, since the idea is to build up a long term relationship. You must also feel confident in their level of technical knowledge, their ability to relate that knowledge to your personal situation and their ability to explain concepts, rules and solutions in an understandable manner. Like choosing an accountant or dentist, you are looking for someone that you can forge a trusting relationship with.

Personal impressions are important when selecting the right adviser, as are recommendations from friends and colleagues.

You must be confident that the individual, or their firm, will be available to advise you for the long term and have sufficient resources to manage your ongoing affairs.

Finally, you must feel confident in the independence of the adviser and their firm, from any obligation to offer only the products of particular financial institutions.

However, for advice relating to your life in Portugal, you need further guarantees.

1. Your adviser must be regulated in Portugal. In principle, no adviser is allowed to work in Portugal, unregulated. European free trade rules mean that, in theory, a UK adviser can cross the channel and ‘advise’ you under their UK regulation, but they should also have registered the fact that they wish to do so with the UK authorities (who will inform their Portuguese counterparts) and hold a special ‘European passport’. Lack of regulation means insufficient protection from any legal system or professional indemnity insurance scheme.

2. Your adviser must be knowledgeable, and hopefully qualified in the rules of both countries, since it is pointless receiving investment advice from a UK adviser or bank, only for them to say that they cannot be held responsible for the tax and inheritance treatment in Portugal in respect of the investments they are suggesting. Likewise, your Portuguese bank or adviser cannot advise on whether your existing UK investments will be suitable for a life in Portugal.

3. Last, but not least, your adviser should not hold ‘client funds’. That is to say, you should never make out a cheque to the adviser, asking him to invest the money! All capital invested should be paid directly to the investment companies and the only reason you should ever make out a cheque to an adviser is to pay any bills for professional services agreed and invoiced by their firm.

What to look for when selecting an adviser

Ask how long the adviser and firm have been practicing, and check their credentials by asking them what qualifications they have.

All advisers have to pass the Financial Planning Certificate (FPC) before they are authorised and regulated by the Financial Services Authority to give advice.

However, many IFAs have chosen to take further exams, either in general financial planning or specific product areas, to improve and demonstrate their professionalism to clients.

Some areas of advice, such as pension transfers, require specialised qualifications. Any firm or individual providing advice on the transfer of a UK pension must be suitably qualified under Financial Services Authority rules.

Some advisers are authorised through other regulatory bodies such as the Financial Services Commission in Gibraltar, which follows closely the UK Financial Services Authority rules and regulations.

Chartered status is an exclusive title only awarded to firms which meet rigorous criteria of professionalism and competence.  All Chartered Financial Planners commit to the Chartered Insurance Institute’s (CII) Code of Ethics and Conduct, reinforcing the highest standards of professional practice in their business dealings.

To date, only just over 100 firms worldwide have achieved Chartered status, indicating that this is a highly exclusive award, reserved for the leading firms within the financial advice market. The CII has 90,000 members in 150 countries and it is the world’s largest financial services professional body. Serving the insurance, savings and financial services markets, it works to enhance professional, ethical and technical standards.

Many financial decisions are of critical importance, and you cannot afford to get them wrong. You need, and should expect, the best quality advice to help you choose the correct course of action.

Financial planning and adapting to changing circumstances is a lifelong commitment, so taking a little time now to find the most suitable type of advice from someone you are comfortable with could save you a great deal of money in future.

Please contact Steve Rodgers of Blacktower Group for further information. Call 289 355 686 or email [email protected]