What to do when your financial adviser moves on

• Independent or restricted? An independent adviser can recommend from the whole of the market. A restricted, or “tied”, adviser can only recommend a limited range of products or providers. You can check any firm’s status and permissions, free of charge, on the FCA Register at register.fca.org.uk, using its Firm Reference Number. It’s also worth asking what independence looks like in practice, not just on paper — for example, what proportion of new client money is placed into products the firm manufactures or manages itself, rather than products sourced from the wider market. A firm can hold independent status and still recommend its own products more often than you might expect.
• Who’s really behind the firm? Some advice businesses are built to be sold — set up or backed by investors looking for a return, with an eye on a profitable exit, rather than a long-term, relationship-led practice. It’s worth asking how the firm came to be, how well established it is, and whether its owners are committed to it for the long term.
• Is anyone financially benefitting? If an adviser recommending a move receives any payment, commission or other benefit for doing so — especially one that only becomes payable once you’ve actually signed up, rather than simply for making the introduction — that’s a conflict of interest, and it should be disclosed to you clearly, in good time, before you make any decision. A payment contingent on you completing the move gives the adviser a direct financial stake in your saying yes. You have a right to know whether any such payment applies, and on what terms.
• Get it in writing. Any promise or assurance made to you in conversation — about fees, service or your investments — is worth having confirmed in writing. This should include the length of time those assurances apply for. If something hasn’t been put in writing, it’s entirely reasonable to ask for that.
• What will you actually pay? Ask for the total cost in writing, including adviser charges, platform charges and fund charges, not just the headline adviser fee. Ask whether you are receiving a discount on any fees, how long the discount lasts, and what the standard rate would be.
• What happens to your existing investments? Moving adviser sometimes means moving product or provider too. It’s worth checking whether anything needs to be sold, transferred or re-registered, and whether that could mean losing valuable guarantees, loyalty bonuses or protected tax-free cash, or triggering exit charges or a tax bill.
• Time to consider. You should be given time to consider the information provided to you before committing to anything, and no adviser should make you feel you need to decide on the spot. If you haven’t signed anything yet, that time is still yours to take.

Warning signs worth paying attention to

Beyond the specific questions above, there are some more general signs worth being alert to, whoever you’re dealing with:

• Information that’s hard to find. A firm’s independence or restricted status, its fee structure, and its policies on things like conflicts of interest and complaints should be easy to find or easy to ask for. If you can’t get a straight and easy answer, that’s worth noting in itself.
• Reluctance to put things in writing. A firm confident in what it’s telling you shouldn’t have any difficulty confirming it in writing. Hesitation, vagueness, or being asked to simply trust a verbal assurance are all worth treating with some caution.
• Pressure to decide quickly. Genuine advice doesn’t come with a closing date. Be wary of any suggestion that a rate, an offer or an opportunity won’t be there if you take time to think it over or get a second opinion.
• Unclear complaints and compensation cover. A UK-authorised firm should be able to confirm, without difficulty, that they’re covered by the Financial Ombudsman Service and the Financial Services Compensation Scheme, and explain how to make a complaint if you ever need to.

Common questions

Do I move with my adviser if they leave, or stay with the existing firm?

It’s entirely your choice. If you’ve built a good relationship with your adviser, you may feel naturally inclined to follow them. Equally, if you stay with your existing firm, they’ll normally introduce you to another adviser to continue the service you’re used to. A couple of things worth checking before you follow your adviser: don’t assume the new firm offers exactly the same service as your current one — do your own research so you know what’s different before you commit. Also, many advisers sign an agreement with their old firm not to take on former clients — sometimes even ones who approach them directly — for a period after they leave, so it’s worth asking your adviser whether that applies to them.

What happens to my pension or investments if my adviser leaves the firm?

Nothing changes automatically. Your existing plans, products and providers stay exactly where they are unless you actively decide to move them. It’s only if you choose to switch provider or product that things like valuations, exit charges or lost guarantees become relevant, so it’s worth checking these before agreeing to anything.

Can my old adviser or their new firm charge me for moving?

Possibly, depending on what you’re moving and how. Switching advisers, products or platforms can trigger exit charges, so it’s reasonable to ask for the total cost in writing before deciding, not just the headline adviser fee — and to ask directly whether the adviser or their new firm are due any payment for you making the move.

If you still have questions or would like to talk to someone, we’d be happy to help. You can reach us on 0114 242 1818 or at enquiries@futuresassured.co.uk.