You arrive at a meeting with your adviser to be presented with a leather bound report with gold lettering on the cover. This looks impressive and you know that you may be required to pay a few thousand pounds for the advice contained in this document. On the other hand you may simply have received a very thin report or just a letter. How can you judge the value of the advice? In this article I will try and highlight some of the points upon which you need to concentrate.


  • You need to establish that the adviser has based the report on accurate information. Please re-read the section which deals with the facts he has ascertained. Are they correct? ,if not you need to correct them. A good adviser will have written the facts in his own words not simply repeated the information you gave him
  • Do you think that the report reveals that the adviser really “understands” you, for example if you are a person who likes detail has this been provided. Or alternatively if you are more creative has the adviser taken time to try and explain the report in a way which you will understand
  • You are paying for a report which is about you. Some firms rely heavily on standard paragraphs. This may be perfectly acceptable as a means of explaining some technical facts but a report with too many standard paragraphs is possibly not worth a huge amount of money.
  • Have a look closely at the wording. For compliance purposes it is necessary for advisers to explain risk and disadvantages as well as the advantages of certain products but look closely to see if any attempt has been made to make complicated facts clear. As the client you deserve to understand the products and the advice you are being given. If it is not clear in the report you will need to ask the adviser to explain these matters to you at the meeting and do not proceed if you do not understand the investment. No adviser should ever recommend a product which he himself does not understand.
  • In the report the adviser will have recommended certain funds which are suitable for your attitude to risk. Make sure that the report explains why they are suitable, not simply that they are suitable. When you have a meeting with your adviser he should be prepared to substantiate his choice of funds. Similarly if the adviser is outsourcing the investment management to someone else you need to ask many probing questions as to why this company is considered to be suitable. Making sure that you are happy about the investment advice is very important at this stage.
  • The most important question to ask of the report is “Does the advice solve my financial problem or give me a long term financial plan or whatever it was which caused you to seek the advice in the first place. If it does not it is not a good report. If the adviser has to “persuade” you that it solves your problem it is not a good report.
  • If there are matters in the report which are not correct or do not suit your needs, get them corrected before you pay for the report and before you proceed with any investments. It is this report which is the basis of the advice and it is imperative to get it right at the start.

Next time we will be looking at the importance of reviewing financial advice.

May 2013