10 Questions to Ask Your Investment Manager or Financial Adviser

Preparing for Your Future?

The relationship with your financial adviser or investment manager is vital. It could determine the difference between a comfortable life and retirement, or one of worry and penny-pinching. It’s a relationship built on trust, and this requires clear lines of communication. You’ll need to work collaboratively to make sure your finances are positioned in the most appropriate and effective way possible to maximise the potential for your investments to grow.

When deciding who you trust with this pivotal role, there are some basic questions you should ask. We have compiled the list below which is a good starting point to see if you and an adviser will be a good fit. This relationship is too important to get wrong.


1)  Is the Company Regulated?

In the UK, financial advisers should be regulated and approved by the Financial Conduct Authority (FCA), and you can check the register to ensure they are. If you use an adviser who’s not approved, you will not have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme if things go wrong.


2) What Are Your Qualifications?

Advisers have to be qualified at Level 4 or above of the Qualifications and Credit Framework. They also need to obtain an annual Statement of Professional Standing (SPS), awarded by the FCA. You should check that your adviser has these qualifications.


3) What Advice Do You Offer?

The services firms can offer vary significantly, from meeting very simple needs to holistic financial planning in which the adviser will consider all your investment needs and recommend a plan to help you achieve your financial goals over your lifetime.


4) How Will Our Relationship Work?

Put another way: How much access will you have to your adviser and how will you be kept up to date on your investments? Will ongoing service be included in your fees or is there a separate charge levied for every call or meeting held?


5)  Do You Have Clients in a Similar Income Bracket and Position?

Some advisers concentrate on particular types of people, either with a specific level of wealth, or specific circumstances. An adviser who has clients that are similar to you on his/her books is likely to understand your situation and goals, and may have specific expertise in the types of investments that are suitable for you.


6) What’s Your Track Record?

Longer performance track records permit investors to evaluate the performance of a fund or manager through a complete market cycle. This helps investors to understand how well (or poorly) the manager has performed during different market conditions. Be sure to ask to see performance records NET of fees so that you can get an idea of the actual returns investors have received over these periods.


7) What’s Your Investment Philosophy?

This is a more open-ended question, but the answer to it may be key to you and an adviser working well together. While an adviser must tailor your investments to your level of risk tolerance, an adviser who shares your views on ethics, risk and goal setting may be easier to work with.

Be sure to ask about the liquidity of your investments and what access you have should you need to take cash out. Also make sure that you have control over the levels of contributions that you may decide to make to your investment portfolios, i.e. that you are not tied into making high levels of monthly contributions which you then can’t stop should your circumstances change.


8) How Do You Manage Risk?

Your adviser should explain what they consider your risk profile to be and how each recommendation fits in with this. If you think you are prepared to take more or less risk than your adviser suggests, ask them to explain how they arrived at your risk profile and whether it should be changed. Should your circumstances change, you should contact your adviser to ensure that their advice continues to suit your needs.


9) What Are My All-in Costs?

It’s important to understand what fees and charges you will pay for advice and when you will be expected to pay. Start by finding out if there is a fee for an initial consultation. You should have the option to pay a one-off fee or you may pay a regular continual fee if the advice is ongoing.

Advisers cannot be paid commission from your investment by product providers and will have to tell you upfront how much their service costs. This means you can be sure you know how much advice is costing you.


10) Who Is Your Custodian, What Security Do I Have?

Ideally, your adviser has an independent custodian to hold your investments, rather than acting as his or her own custodian — à la Bernie Madoff, the notorious financial advisor who defrauded clients through a multibillion-dollar Ponzi scheme.

If you are interested to explore investment opportunities, please contact:

Emma Parkes at Church House Investment Management

Email:                    e.parkes@church-house.co.uk

Telephone:          +44 (0) 20 7123 4741

Website:              www.ch-investments.co.uk/yacht-crew/

Instagram:          @yachtcrewinvestments

Church House is authorised and regulated by the Financial Conduct Authority