Why You Should Always Get Regulated Financial Advice

We at gpfm often get asked why it’s important to always get regulated financial advice.

We could answer this question with another question: would you use an unlicensed/unregistered doctor, dentist, lawyer, etc? Of course not. So why take up advice from an unregulated financial advisor? 

Beware of financial scammers

Recently there has been a lot of talk in the press on investment and pension scams and since the introduction of pension freedoms, uncontrolled financial advisors and schemes have exposed consumers to more sophisticated scams.

From phone calls through to emails, consumers are battered by different companies all declaring they know best on ‘pensions, loans and mortgage advice’ for you. It may be tempting to take them up on their offer due to the convenience but this can cost you dearly.

In 2015/16, over 3,000 people reported being caught up in scams with an average loss of £32,000. The actual figure is likely to be much higher due to many victims of scams not reporting the incidents.

Sadly, people who are retired and aged 60 years or over are most likely to be victims of financial scams. Only a quarter of people seek professional financial advice before taking up an investment and one in eight people spend little to no time researching investment products before investing their money.

Why use a regulated financial advisor?

  1. Peace of mind

To qualify as regulated, a firm needs to be a registered legal body.

This means the financial advice company has capital adequacy, advisors with relevant qualifications to practice, and controls and systems enabling them to look after clients.

This gives you peace of mind that the company won’t disappear along with your money.

  1. Treating customers fairly

Regulated firms are obliged to follow the Financial Conduct Authority’s rules that demand financial advisers give advice that is fair, suitable and appropriate for a client’s needs. This comes under the FCA’s ‘Treating Customers Fairly’ drive.

  1. Qualified practitioners

The FCA requires that all financial advisors have financial qualifications relevant to their post and at least a Level 4 qualification within the national Qualifications and Credit Framework.

So your adviser must be educated in financial advice to around a university degree level.

Feel free to ask your advisor what qualifications they have to make sure you’re getting advice from a qualified individual.

  1. Right to complain

By using a regulated financial advisor, you will have the rights and ability to complain officially if you have lost out financially over having been given poor advice or if you’ve been mis-sold a financial product or package.

Suitably regulated financial advisors have a thorough complaints procedure and if you’re not satisfied with their response you may contact the Financial Ombudsman (independent adjudicator) who will consider your complaint further.

According to gpfm’s Scott Atkinson:

“If people receive unregulated advice they are leaving themselves wide open to unsuitable investment solutions, high commission deductions from their investments, possible inability to exit from investments, no FCA protection and could potentially lose all of their investment value with no recourse for compensation.”

That’s why, Mr Atkinson says, receiving regulated financial advice is so essential:

“Getting regulated advice will lead to an outcome that has the best interest of the client. The client will be protected by FCA regulation and receive a suitable recommendation based around their personal circumstances and objectives. They will also receive appropriate advice that factors in the relevant tax and pension rules to avoid any high taxes or tax charges when accessing their pension pot.”

So, if you want to be sure you can retire the way you’ve always dreamed of, speak to gpfm’s financial planners today on 01992 500261 or contact us at enquiries@gpfm.co.uk. Our retirement planning services will help you find the best ways to save for retirement.

This article is for information only and must not be considered as financial advice. We always recommend that you seek independent financial advice before making any financial decisions.