Without knowing how to choose a financial advisor, many of us ask friends or family for a recommendation, or go to the bank or building society we have always dealt with.

You can get financial advice from:

  • Tied agents advise and sell products from a financial services firm they are tied to. They still have to give you a product that is suitable for your needs, but they cannot shop around on your behalf.
  • Multi-agency intermediaries, such as investment or mortgage brokers, advise on and sell products from a number of financial services firms.
  • Authorised advisors are obliged to consider relevant products from all financial services in the market.

The first time you deal with a financial advisor they must give you their ‘Terms of Business', which sets out their authorised status and a description of the services they offer. It will also explain whether they are tied to one financial services firm for any products they advise on.

Mixed status
The number of firms an advisor deals with may vary from one type of product to another. For example, a financial advisor might offer pensions and investments from six financial services firms, but may be tied to one insurance company when selling home insurance.

Check your advisor is authorised
Not everyone who calls themselves a financial advisor is authorised to give you financial advice. Some may even be working illegally. You can check whether an advisor is authorised by checking the Central Bank’s registers website.

Always make sure that the advisor you use is authorised to give financial advice before handing over your money. If they aren't regulated and things go wrong, you may not have access to complaints procedures and compensation schemes. For example, the Fibnancial Services Ombudsman cannot investigate complaints against an unauthorised firm or advisor.

All financial advisors that are authorised have to meet the requirements of the Central Bank’s Consumer Protection Code.

But it important that you take some time before choosing an advisor and look at all your options. You want to be satisfied that you choose the right type of advisor to help you make important financial decisions.

You need to find an advisor who

  • Is authorised
  • Listens to you and answers questions openly
  • Has experience of situations such as yours
  • Is willing to take time with you and does not put you under pressure
  • May be willing to negotiate fees and commission so you are satisfied with what you are paying
  • Gives you advice on a wide range of products and financial services firms to suit your needs.

Steps to take when choosing an advisor:

  • For a list of advisors in your area. You can log onto the Central Bank's registers website or call 01 224 4000
  • Talk to two or three advisors over the phone or in person before choosing one
  • Ask about their services and what type of advice they can give you
  • Find out how many financial services firms they deal with for the type of product you may need
  • Ask how your adviser gets paid - is it by fees, commission or a mixture of both?

Are they experienced and can they give you the kind of advice you need?