These are personal finance specialists who will deal with anything from pensions
to investments to mortgages. Many will specialise in one particular area.
The
good thing about buying a mortgage through an IFA is that they seem to be more
strongly regulated, than "mortgage advisers" and will have had to obtain
qualifications (See IFA Qualifications)
There
may be thousands of mortgages to choose from but an IFA has access to computer
programmes, which easily scan the whole market for your specific
needs.
The
best way is via word of mouth. But make sure that you are being recommended someone
who helped your friend with a mortgage and not an IFA who's an expert
in an unrelated area.
Also
think twice about using relatives, friends of friends etc. on the principle that
business and pleasure are best not mixed.
An
IFA
will usually see you free initially and then charge either an hourly fee - from
£30 to £100 (Avg £75) plus VAT - or you can agree on them taking a
commission, which is more common.
If
so this normally comes from the company whose products they have recommended.
If
you pay commission the IFA has to reveal what it is.
The number of fee
based IFA's
has grown rapidly in recent years. The idea with fees is that you pay these charges
up front so that there's no suggestion that the IFA
is reliant on any commission from the mortgage plan they recommend.
In
other words the advice is genuinely independent.
The
standard charge at the time of writing is £75 an hour (usually after a free initial
meeting). But when you've added all the letters and follow up you may find that
paying commission would have been cheaper. However you will be sure that what
was recommended really was in your best interests.
The
IFA
should be able to give you a quote. Many will give you a guaranteed fee ceiling.
Do
you have a few references I can call? ie former happy clients.
Are
you insured against giving bad advice?
How
will you get paid? Fees or commission?
It
may be best to judge your IFA
on how they deal with your questions. Directly? Or do you have difficulty
in getting a straight answer.
Any
good IFA
should come over as straightforward and honest. If they don't specialize in mortgages
they should be mature enough to know that recommending a more suitable IFA
to you is good business all round.
Anyone
claiming to be an IFA has to be qualified. Ask your IFA exactly what their qualification
is and don't feel at all shy about checking up on them see How
to check up on an IFA
The
Financial Planning Certificate (FPC) is the bench mark qualification and
comes in three parts. Any salesperson (eg a tied agent) needs part one to sell
mortgages BY LAW.
A
beginner IFA can give advice under strict supervision
ie by their firm if they've only got part one. However to be a fully-fledged IFA
they must have parts 2 & 3 as well.
The
IFA will usually place their relevant qualification after their name. Many don't
bother putting "FPC" but may put one of the following abbreviations:
AFPC
Advanced Financial Planning Certificate
ALIA (Dip) Associate of
the Life Insurance Association
MLIA Member of the Life Insurance
Association
FLIA Fellow of the Life Insurance Association
AIFP Associate of the Institute of Financial Planning
FIFP
Fellow of the Institute of Financial Planning
AIFA Associate
of the Institute or Faculty of Actuaries
FIFA Fellow of the Institute
or Faculty of Actuaries
CFP Certificate of Financial Planning
Also
there's the:
Securities
Institute Diploma BA or MA in Financial Services
(Note.
These are not all the qualifications available and they're not listed in
order of prestige).
While
further qualifications to the FPC aren't everything and aren't necessarily
a guarantee of good service, at least they indicate that the IFA
is serious about their career and taking a long-term view.
Call
their Consumer Helpline on 0845 606 1234 and they will quickly tell you
what qualifications your IFA
has and what type of advice she / he's allowed to give you.
Their
"Industry Helpline" could help you check up on a firm of IFAs. Tel 0897
334455
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