What does a financial advisor do?

Many of us, especially the younger generations, don’t tend to know a lot about finance. This isn’t surprising, seeing as it isn’t something most of us ever learnt about at school, just something that became a headache on entry to adulthood. For many this is fine. We pay rent/mortgage, try to keep on top of bills and pay taxes. Where a financial advisor comes into play is in the more complicated and crucial stages in your financial life.

Some stages will be applicable to everyone, for instance planning for retirement, or dealing with inheritance. Other factors become more complicated such as investments and savings accounts.

Financial advice is also extremely useful for those undergoing big changes in their lives. For instance, buying a property, starting a family or getting divorced. A financial advisor is fundamentally there to guide you through the financial ebbs and flows of your life, aiding you in achieving your goals.

An important distinction that must be made is the difference between financial advice and financial guidance. A financial advisor will tailor their advice, making recommendations that are most fitting to your needs and your situation. Financial guidance is offered by many organisations, including charities, and presents and informs you of the various financial options available, however, they won’t make specific recommendations. It is important to note that financial guidance services are not regulated by the Financial Conduct Authority (FCA). These means that if there are issues with your choices, you can’t make a claim to the Financial Ombudsman Service.

What types are there?

There are two basic categories of financial advisors, independent (IFAs) and restricted financial advisors. IFAs will be able to give a much more comprehensive analysis of different products from all sorts of companies. Restricted financial advisors will provide more concentrated analysis. They often specialise in one area, for instance investment or mortgage advisors, or focus on a certain number of products or services. It is best to get an advisor most suited to your needs. IFAs tend to be the better choice, as they can advise on a whole range of different issues.

Can I get free financial advice?

While many websites and organisations may offer free initial consultations, formal advice will always be at a price as there are understandably costs involved with providing regulated advice. Costs can be charged in a number of ways such as the following, set out by Citizens Advice :

  • An hourly rate.
  • A set fee according to the work involved.
  • A monthly retainer
  • A percentage of the money invested.

This will be agreed upon upfront. The costs can vary massively depending on the advisor and the situation/requested service. For percentage fees, the average cost of advice is 2.4% of amount invested for initial advice and 0.8% per year for continued advice, according to the FCA.

What many organisations do offer for free is financial guidance. This can be found through organisations such as Money Helper, Citizens Advice, National Debtline and the Financial Ombudsman Service.

What do we at FSW do to stand out?

First Sentinel Wealth is an independent financial advisory. As such, we offer advice on all sorts of applicable topics from tax advice to ESG investing. Our financial advisors will give you personalised, comprehensive advice and assist you with all of your financial needs. Technology is at the forefront of our proposition to ensure we provide a high quality service to our clients which makes their life as easy as possible and optimises the quality of advice that we can provide. As a number of our advisors have also spent time working abroad, we also have the expertise to provide international and cross border financial advice, with many of our clients coming from all over the world.

To conclude

Financial advice is an extremely beneficial practice, that will allow you to understand and navigate the intricacies of the financial world. It will give you peace of mind during the big changes in your life, whether you are getting married, buying a new house, or have just lost a loved one etc. It can also bring about new opportunities, allowing an expert exploration of the investment market, and help in building up your pension.

Talk to one of our expert financial advisors today.


Read our analysis of the Spring Budget