There are several types of financial adviser and it is important not to be confused by who they are and what they do.

Here are some examples:

• Life insurance salespeople must pass a basic industry-wide exam before advising clients.They are only allowed to sell the products of the company they work for, which means that their choice (and yours) is likely to be limited.
• Tied agents: run their own firms but can only recommend the products of the company with whom they have links.
• Stockbrokers: They can either take on the entire work, or act in an advisory capacity, or simply do as you tell them. Stockbrokers must pass their own specialist set of qualifications.
• Independent financial advisers (IFA): IFAs can advise on the entire range of products across the industry. Some are members of "networks", organisations that carry out research and help with additional training of their members.
• Execution-only brokers: are IFAs too. Except that unlike IFAs, they do not give advice to their clients. They simply sell products.
• Multi-ties: the financial regulator, the FSA, has just announced proposals to allow a new breed of adviser, the so-called "multi-tie" or "distributor", who can link up to several companies

Which is best?
Ultimately, if you know very little about personal financial planning and you want an adviser who can find something that is tailored to your specific needs, it makes sense to find an IFA.

Where can I find an IFA?

There are several sources of IFAs:

• Personal recommendation - ask your family and friends if they are clients of someone they trust.
• Scour the papers and personal finance websites - over several weeks, most will refer to a few dozen advisers between them.
• Find one via a website:

  www.unbiased.co.uk

  or

  www.sofa.org

Also:

1) Money Management, a monthly magazine, has a list of financial advisers who work by charging fees only, instead of commission.
2) Ethical Investment Research Services (Eiris) monitors funds for their ethical stance. The organisation can also supply a list of advisers who are experts on the field of ethical investments.
3) The Association of Private Client Investment Managers and Stockbrokers, a trade organisation, can supply a list of stockbrokers in your area.

Preparing to see an IFA

When you go to see an IFA, he will want information from you.

• All your policy documents. This includes anything relating to savings policies, building society pass books, bank account statements, investment documents (including latest valuations), life insurance, any other protection policies (medical insurance, critical illness, income protection).
• Mortgage details: the original mortgage offer and any conditions on that offer (which may help to find a better and cheaper home loan), the latest annual statement showing what you owe, any home or contents insurance which you had to take out as a condition of your loan.
• Pension scheme statements and any scheme booklet you have: if you have a personal pension, you need to find the latest statement showing what your fund is worth, plus the original particulars of the scheme. If you are in a company scheme, the same applies.
• P60/tax assessments: your firm will send you a so-called P60 form, usually in late April, which tells you how much you have earned in the past year. Try to find as many as possible relating to previous years. If you are self-employed, bring your tax papers with you, including past years' Inland Revenue assessments.
• The most up-to-date investment statements from your fund manager
• BR19 (State Pensions Forecast). This is a form, available from any local DSS office. It will tell you how much you can expect to receive both from your fund manager and from the State Earnings-Related Pension Scheme (Serps) at retirement.

Questions to ask your IFA

• How are you paid? Most advisers today are paid by commission earned on the products they sell. Some people believe that commission-based remuneration can have an undue influence on the products you are advised to buy.
• Are you prepared to rebate commission? The way to ensure you are getting good value from your adviser is to take advantage of a requirement that they must tell you the commission earned on the product they are trying to sell.
• If I pay a fee how will that cost be arrived at? In most cases you can opt to pay a fee instead of commission, which is then rebated back to you in its entirety. This may be worthwhile.
• What are your research facilities? The best IFAs have access to a range of sophisticated computerised information systems that will provide comparisons between products, performance figures. They may also have access to research from their network, or from organisations they subscribe to. The biggest IFAs may also employ their own researchers.
• Can I come to your office? Many IFAs like to come round your home. Ideally, they should be professional enough to have a reasonable office structure, including secretary. This is so that they can service the relationship more fully.
• What are your areas of expertise? Some IFAs are better than others in certain respective areas.
• Are there any "hidden" charges? Many products are designed in a way that makes it impossible to tell how much is beinbg taken out in charges.
• What is meant by suitable advice? Advisers are required to give "suitable advice". You should then ask in what ways it is "suitable".
• How many options did you consider for me? The IFA should be able to explain what the main alternatives were, why they were unsuitable and why he plumped for the one that he did.

How do you rate an IFA?

When you have been to see an IFA, you should be able to assess them on the basis of a number of key points

Here are some of them:

Academic qualification - the main (and basic) qualification is the Financial Planning Certificate (FPC). The next stage is the Advanced Financial Planning Certificate (AFPC).

Listening abilities - your adviser must be able to put into practice your financial vision.

Compatible personality - if you are going to have a long-term financial relationship, one that must involve trust, you must be able to get on with the adviser.

Written and oral communication - Can your adviser explain clearly in writing and verbally what his advice really means?

Options offered - What did the adviser suggest? Did it make sense? Did you feel comfortable with his proposals?

Follow up - what happened next?

Service - Did s/he get the right form to you? Has he been in touch to see if you are comfortable and happy with the advice and its outcome?