Questions you need to ask a financial adviser

This guide gives you a checklist - and a quick cheat sheet - of questions to fire off before that first call or meeting, along with the answers you want to hear, and the ones that should have you Googling "witness protection application" under the table.

Verify credentials: Are you regulated and qualified?

Your opening move is simple:

"Are you regulated by the Financial Conduct Authority (FCA), and can I find you on the FCA register?"

To look up an adviser, all you need is their name and reference number. If they don't appear, you've basically caught them dangling their rod in the river without a fishing licence...and you're the fish.

No FCA authorisation means no Financial Ombudsman to complain to and no chance of a Financial Services Compensation Scheme (FSCS) payout if the firm fails owing you money. (The FSCS covers up to £85,000 per person, per firm for investment losses caused by a failed firm.)

On top of that, your money should be held with an FCA-regulated platform/custodian in a segregated nominee account (you remain the beneficial owner), never in the adviser's account.

This gives you two lines of protection. If the platform fails and there's a shortfall, the FSCS may compensate up to £85,000 per person, per firm; and for unsuitable advice you can complain to the Financial Ombudsman Service, which can order the firm to pay you compensation. If the firm has gone bust and can't pay, the FSCS may step in to cover eligible claims up to £85,000 per person, per firm.

"What qualifications do you have?"

By law, advisers must have at least a Level 4 qualification (e.g. a Diploma in Financial Planning) and to maintain a Statement of Professional Standing (SPS), renewed every year with fresh training.

That's the floor, not the ceiling. The keen ones will have extra qualifications framed on the wall, and if your situation's more niche (say a pension transfer or estate planning puzzle) those extra letters after their name might save you more than they cost.

What services do you offer? Are you independent or restricted?

Some advisers are tour guides for a single city, while others can take you round the world. Work out which ticket you are buying.

"What services do you offer?"

Are they purely about investments, or do they do full-fat financial planning: retirement, tax strategy, estate planning, the whole hog?

High-net-worth clients (£1 million+ in investable assets) often need someone who can see the big picture: not just growing a portfolio, but also advising on inheritance tax, trusts, or selling a business without haemorrhaging value in tax.

"Are you independent or restricted?"

These are regulatory labels that it's important to know:

1. Independent Financial Advisers (IFAs) can recommend from the entire market. They can peruse the full universe of investment products and recommend the best fit for your situation based on their judgement.
2. Restricted advisers work within narrower lanes. They might only deal in certain product types or from a limited panel of providers. For example, they could be retirement-product specialists who look at the full market in that niche, or they might be tied to one bank or insurer's offerings.

If they say they're restricted, follow up:

• "Does that mean you only recommend products from certain providers? Which ones, and why?"

A good restricted adviser will be upfront about it, often because they're deep specialists.

Even if restricted, they should still look across a decent range within their specialism, not just flog one or two companies' products.

Independent advice gives you the broadest choice and removes the built-in tilt towards any one particular provider.

Restricted advice isn't automatically bad. All advisers have to meet the same suitability rules; however, you need to know the boundaries. It's a bit like only shopping in one aisle of the supermarket: great if it's the one you need, useless if you came in for bread and it's the pet food section.

Who's your typical client? Have you worked with someone like me?

The way an adviser handles £5 million isn't the same way you handle £50,000 in a rainy-day ISA. It's somewhere close to the difference between steering a superyacht and a pedalo. So be sure to ask:

"Do you have other clients in a similar position to me?"

Some advisers won't look at you unless you've got at least £250,000, £1 million, or whatever their cut-off point is.

Others specialise in people in particular silos: business owners, retirees, expats.

If you've just sold your company and your savings look like a Premier League footballer's wage slip, you'll want a professional who's used to working with sold-up ex-entrepreneurs. If you're coming up to retirement and want help organising your finances before disappearing into a sunny Spanish vista, a retirement and/or expat specialist will be best suited.

On the flip side, if your adviser normally works with £50 million family offices, make sure you're not the "budget option" they palm off on the intern.

You can follow up with:

"Can you give me a few examples (in general terms) of work you've done for similar clients?"

Obviously, you're not going to get names and account numbers. But you should be able to dredge up some war stories: complex tax planning, sudden wealth events, family business succession, etc.

In short, fit is everything. An adviser used to big-ticket clients should be chomping at the bit to get started on inheritance tax planning, trusts, and multi-asset strategies.

Meanwhile, if they seem to flounder or pad with waffle, it could be a clue that they're out of their depth.

A £5 million portfolio is nothing like a £200,000 one: there are different risks and opportunities to contemplate (and they'll need a much bigger spanner if it all goes wrong).

How do you charge and what will it cost me?

Before you hand someone the keys to your money, you need to know exactly how much petrol they plan to burn getting it from A to B. Advisers must be upfront about this fee, so this is your chance to get the numbers on record.

"What do you charge, and roughly how much would I pay for my situation?"

This covers two points in one breath: the fee structure, and exactly how much will vanish from your account. Most advisers offer an initial meeting for free with no obligation.

Let's talk rough numbers:

1. Hourly fees: Can range from about £100 to £500, with many sitting somewhere near £150. If you're going down the hourly route, pin them down on how long the job will take so when the invoice arrives you're not left staring at a figure that looks like the defence budget of a small nation.
2. Fixed fees: A set price for a defined task, like £2,000 for a financial plan or even £10,000 for a more complex strategy.
3. Percentage of assets: An annual cut of what they manage for you, often 0.7–1% on investible assets over £300,000. On a £1 million portfolio, 1% is £10,000 a year. Sometimes, there might also be an initial set-up percentage.
4. Monthly or retainer fees: A flat monthly amount, sometimes alongside asset-based fees.

Keep in mind that the FCA says fees must be disclosed before you sign up, so "we'll work it out later" like Jimmy McGill cutting backroom deals is never an acceptable answer.

Challenge your adviser to show how their fee stacks up against the value they'll add to your portfolio. If they can't make the case, find someone who can.

Red flag alert: if an adviser says "the advice won't cost you anything; the investment company pays me," that's about as disconcerting as someone offering you a "genuine" Rolex out of a car boot. Commission on investment products was banned in 2013. The only exceptions are certain insurance or mortgage products, and they should spell those out if relevant.

What's your investment philosophy and how do you actually invest?

You wouldn't let an interior designer run wild in your home without checking their taste first. The same goes for a financial adviser: open the black box and make them explain how they work in terms you understand.

"Do you take an active or passive approach?"

While "active" might sound like a good trait and "passive" brings to mind your adviser sitting with arms folded all day, puzzling over Wordle and celebrity gossip articles, the investing meanings are different.

Active means they are trying to beat the market by picking individual shares, hopping between funds and timing trades. Passive means they use low-cost index funds to match the market and stick to a steady asset mix that suits your goals.

The evidence is clear that very few active managers can beat the market consistently once fees are factored in. An adviser who focuses on asset allocation, the right tax wrappers, and keeping costs down is usually sailing safer waters (even if it means they'll never be played by Leonardo DiCaprio or Christian Bale in a finance blockbuster).

"How do you decide the right investment mix for a client?"

The type of adviser that you actually want will start with your risk profile, goals and timeframe, then build from there.

If they breeze past all that and head straight for their pet fund, you might as well be picking stock tickers with a fistful of Scrabble tiles.

"Who makes the day-to-day investment decisions?"

In some cases it will be the same adviser you meet. In others, it could be a fund manager you never deal with directly. Either setup can work, but make them explain who's actually making the decisions and how it all runs, so you're not left wondering who's at the controls.

"What kind of reporting do I get?"

You should expect clear, regular performance updates with realistic benchmarks.

Will you provide ongoing service and what does that look like?

A good financial plan should age well but still needs maintenance, like a prized bonsai tree (not like that mystery Tupperware at the back of the fridge). So, ask:

"Do you offer ongoing advice or portfolio management? What does that include and what will it cost?"

Also, clarify communication. Can you call or email freely, or is every question billed? Can they work over Zoom if that's easier? If they're hard to reach at the start, that's usually a preview of what's to come.

Ask what happens when you want to head for the exit. How long is the notice period they request? Check you aren't signing up for a multi-year contract with exit penalties that keep you trapped like a wasp in a pint glass.

How will you tailor the advice to my tax situation and goals?

You don't need an adviser to tell you to max out your ISA and SIPP. As we mentioned, this guide is for people with over £300,000 in investable assets.

At this level, you want an adviser who can show you how the tax code bends, and how to make sure you're the one doing the bending.

A competent adviser will talk specifics. They should bring up how they'll use your allowances and the right wrappers.

They should be alive to dividend tax, income tax bands, and inheritance tax. At 40% above the £325,000 threshold, that's like HMRC pulling up a chair at your wake and pouring themselves a large one.

The good ones will have strategies to soften the blow: residence nil-rate bands, trusts, life insurance written into trust, or other estate planning tactics.

It's well worth asking:

"Do you work with tax advisers or lawyers when needed?"

Are they more of a Jesse James lone rider (cool on the big screen, less cool managing your money), or are they the conductor with an orchestra behind them?

Whether you're selling a business, setting up a trust, or structuring an estate, it can be comforting to know your adviser's got a multi-disciplinary team waiting in the wings for those tricky jobs that drift into accountant-and-lawyer territory.

"Will you look at the whole financial picture or just my investments?"

Proper planning is holistic. Your portfolio doesn't live in a hermetically sealed parallel universe. The rest of your financial life (retirement targets, private school fees, mortgages, even how you want to pass your money down) should all feed into the decisions you make with your investments.

"Will you be doing a detailed fact-find with me, and what will that involve?"

By regulation, they have to do this. An adviser has to gather information about your finances, needs, and risk attitude before advising.

Red flag alert: If an adviser ever jumps into product recommendations without learning about you first, that's a violation of standards. By the time they make suggestions, you should have fielded more questions than a nervous contestant on Mastermind.

Questions to ask a financial adviser: cheat sheet

Category	Question to ask
Credentials and qualifications	Are you regulated by the Financial Conduct Authority (FCA), and can I find you on the FCA register?
	What qualifications do you have?
Services and scope	What services do you offer?
	Are you independent or restricted?
	Can you only recommend products from certain providers? Which ones, and why?
Experience and fit	Do you have other clients in a similar position to me?
	Can you give me a few examples (in general terms) of work you've done for similar clients?
Fees and costs	What do you charge, and roughly how much would I pay for my situation?
Investment approach	Do you take an active or a passive approach?
	How do you decide the right investment mix for a client?
	Who makes the day-to-day investment decisions?
	What kind of reporting do I get?
Ongoing support	Do you offer ongoing advice or portfolio management?
	What does that include, and what will it cost?
Tax and holistic planning	Do you work with tax advisers or lawyers when needed?
	Will you look at the whole financial picture, or just my investments?
	Will you be doing a detailed fact-find with me, and what will that involve?

Feeling almost ready to take the plunge? Find out what really happens when you hand control to a financial adviser.

Bottom line

Think of these questions as the stress test for your would-be adviser.

Houdini made a career out of inviting strangers to wallop him in the stomach. A good adviser should be just as unfazed when you hit them with, "How do you charge?" or "What's your investment philosophy?"

If they keel over like they've just been sucker punched while waiting in line at Tesco, or dance around your questions like a pantomime villain, take the hint and keep moving.

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