In my previous article I looked at the fact finding which the adviser would carry out to establish your aims and objectives. This fact finding would normally take place at an initial meeting with the adviser.

You would now expect there to be a lull in proceedings while the Adviser and his team carry out the required research. They will be investigating your existing investments to make sure they are suitable for you and suit your attitude to risk. Sometimes products purchased many years ago have high charges or a limited fund choice. Remember you are paying for the advice, so if the adviser suggests moving an investment he is charging you a fee so he gets paid whether or not you take up the advice so you will see that now there should be no bias.

The research will also cover the investment of any new lump sum or regular savings you wish to make. The adviser will chose a suitable product and fund and you will pay a fee for this advice.

It is likely that based on the results of your risk assessment the adviser and his team will draw up an asset allocation which suits your needs and attitude to risk. This will cover both your existing and new investments.

The adviser should be using this time to pull together his advice and you would expect that this would be presented to you in the form of a report. The key thing to notice with a report is not the weight of the report but the relevance of the information. A two page letter which identifies your needs correctly and proposes a solution can be just as valuable as a huge report with a great deal of additional “bumph” to pad it out on the basis that you can be charged more if the report is large. You are being asked to pay for advice which is valuable to you and so you should be prepared to pay money for a short report or letter which solves your problems, saves you tax, or gives you a long term plan.

On the subject of the long term plan, the report of whatever size should include some type of cash flow statement which indicates that the plan will satisfy your long term needs.

Your adviser can present the report to you in a number of ways, he can send it to you and then arrange a meeting to explain it ,he may e mail it or he may wait for you to come into the meeting before presenting it to you. Ideally you should have the report in advance so that you have time to study it and prepare questions.

At the meeting some advisers will use a laptop to help you understand the content and to work out various scenarios with you. This is of particular importance if the report indicates that you will not be able to achieve your objectives without either investing more money or taking more risk.

In my next article I will try and help you understand how to judge a good report.

April 2013