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IFA - Finding a financial advisor to trust with your money is no mean feat!
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 insurance company, bank or any other body. An IFA usually works 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. The IFA will 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 current financial position and investigate/research the markets to make sure that your assets are protected and tax-efficient.
An IFA will spot the areas in your personal finances where improvements could/should be made in order to help you reach your goals and to be financially secure in the future.
Number 1 - The Goldern 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 an IFA will look at/research products from the entire market; unlike tied or multi-tied advisors who can only sell from a limited product range. This is a legal distinction, so you must ask the question; Are you an Independent Financial Advisor? Don't accept any hedged answers.
The writer of this article is an Independent Financial Adviser (IFA) and as such is writing for you, as opposed to any particular product provider or investment company.
Whilst it's not foolproof the best way to ensure that you get decent honest advice, the following questions should help you to find a reputable IFA.
Questions to ask your Adviser: -
How long have you been established in business?
In the UK the rule of thumb is you would select an IFA business that has been established for at least three years, I would suggest five or more years, as it is vitally important that the person or company looking after your financial needs is stable and will not be moving on.
Are you authorised?
This is tricky! As in Turkey the same applies in North Cyprus, there is no Regulatory Body currently set up for Financial Advisers. All businesses need to be registered and must be known to the Central Bank but sadly this is where it ends. A reputable IFA will self-regulate to EU standards, this will be seen in how the company conducts themselves. The IFA will ask questions and record your financial situation in writing, any advice will be given in writing and you will be issued with terms of business (TOB) The IFA will hold professional qualifications, which is required by law in the UK.
What qualifications do you have?
There is NO requirement in Turkey or NC for a financial advisor to be qualified but a reputable IFA will want to make sure their advisors are not only qualified up to the EU standard but maintaining the knowledge they need to be able to GIVE advice on. The important question to ask is not only what qualifications do you have, but what do you do to keep upto date? This is known within the financial services industry as “Continuing Professional Development” (CPD).
Can I see your Terms of Business documents (TOB)?
Ask to take a look at their ‘Terms of Business (TOB)’ 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 Turkey and international issues?
There are very good advisers in the UK and other jurisdictions but when it comes to helping clients in the Turkey or NC they are lacking because they do not have the local expertise to make sure they get the best for a client. It may be that you would want to keep an adviser in the UK and complement them with an expert in the Turkey.
Do you hold client’s money?
You should not give money directly to a financial adviser as an Adviser should not hold client money. This is very important because it keeps things much cleaner and easier to trace keeping the adviser above question in regard to your money/funds.
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 and relocation. If the company is bigger than just one or two advisers then these problems will not be an issue. IFA’s with a number of advisers often have a greater level of technical expertise, experience and CPD training being shared.
If you would like or require further information or have questions on the above, then please feel free to contact us at the office or drop me an email at email@example.com