Financial 'advice' or just another sale?

With the RDR looming in 2012 the onus is now on IFA's and financial advisers to mantain their qualifications at a higher level than previously. Simple FPC3 or CEFA qualifications just won't cut it any more and Diploma or Chartered status will now be almost a prerequsite. This is a smart move by the FSA partly designed to clean up the financial services industry and bring a regocgnised standard to the financial services industry. Advisory organisations will have to decide whether they want to go down the route of qualifiying their advisory sales force in order to make them truely 'independent' or stay as they are and be labelled as a 'sales' force.

Financial adviser or Sales man? What is the essential difference between a financial 'adviser' and a sales person. As a recruitment consultant working in the financial services recruitment industry I see a hell of a lot of different roles that all encompass the same specifications - the sale of financial products - whether on a self employed basis working through various providers (usually the ones with the best commissions) or as an employed adviser selling the products of your employer. Most roles will all involve some sort of up selling.

So how do you differentiate from an adviser providing true 'advice' or one selling you the product that best fits their needs or acheives their target. My advice - no pun intended, would be to construct a checklist of questions that you can use to validate whether or not the adviser is offering you advice in your best interests. Of course, before you interview financial advisers or IFA's to find out what they can offer, you need to ask yourself some questions first to determine exactly what you need. Is it a full financial overhaul or a lifelong financial plan with long term goals, is it just a mortgage or protection policy. The answers you give will help you determine who's services you will require. The questions to ask should resemble something along the lines of the below:

• What experience do you have? - find out how long they have been practicing, which companies they have worked for previously - it will give you an idea as to whether they will have the right experience.
  
• What are your qualifications? - will help you determine whether or not they have the right qualifications to be able to assist you
  
• What services do you provide? - Some may be able to offer pension tranfers, some may not, some may offer mortgages but can't do investment business - there are a few variations and the question is a valid one to determine if they can help you.
• How do I pay for your services? - A vital question to ask - since the RDR was announced more and more advisers are offering fee based services alone, rather than commission based - the advice offered is more likly to be impartial and true financial 'advice' as there is no benefit to the financial adviser pushing products from one provider (usually with the biggest commission rates!)

A simple list of just a few questions, but they will help the client to decide if the financial adviser is more of a 'salesman' then a true financial planner. In some cases, the advice and financial products offered by a financial adviser will be absolutely spot on, whether with the provider paying the best commission or not, so don't discount out of hand the financial advisers that will take the 'salesman' route after the RDR but if you are looking for truely impartial. independent financial advice then I would suggest a reputable IFA.