Finding an independent financial adviser can seem daunting, but this article explains how to sort the wheat from the chaff 

Pick an adviser you can trust 

THE flurry of savings schemes destined to hit the market in the next couple of years means choosing a competent independent financial adviser is more important than ever. It is important to distinguish between independent advisers who can recommend products from any company, and tied agents who can sell products from only one firm. 

The government announced recently the long-term individual savings account (Lisa), which is due before the end of the year. The stakeholder pension is launched in 2002 and the individual savings account (Isa) will replace Peps and Tessas in April. All highlight the need for specialist advice. 

The standard of advice given by banks and building societies can be very inadequate. But how do you choose an independent financial adviser IFA) and how do you make sure he is not a commission-hungry cowboy. Here are 10 questions to ask an IFA. 

1. What qualifications do you have? 

All advisers must have passed the Financial Planning Certificate (FPC), which has three levels. Many of the best advisers move a stage higher and take the advanced FPC. Once they have passed they can use the letters MSFA after their name. 

2. How are you paid for your work? 

Advisers are traditionally paid commission on the products they sell. But increasing controversy about the size of commission payments, especially on long-term investments such as pensions and endowment policies, has led more advisers to offer customers the option of paying a one-off fee. The commission that would have been paid is invested in your fund and can aid performance. 

If you decide to pay a fee you will usually be billed by the hour, so ask for an estimate of how long the advice will take. 

If you go down the commission route make sure the adviser tells you how much he will receive from a range of products - he is obliged to tell you. If he insists on recommending one of the highest commission earners it may make sense to get a second opinion. 

3. How do you select the best funds? 

A good adviser must research the market thoroughly for each customer. Many firms have research departments or subscribe to specialist research companies, which provide performance data on investment funds. Past performance should always be considered, but of paramount importance is the company's financial strength. 

4. Will you visit me at home? 

Some advisers visit you at home or work, night or day. Others insist on an office appointment. For many people, it is important advisers adapt to their work schedules. You should not select your adviser on this basis alone, but if seeking advice means a lengthy journey or a long wait, you could get fed up quickly. 

5. How long have you been in business? 

There is not necessarily anything wrong in dealing with a new company, but a well established firm with a good history is often preferable. You may also want to discuss who owns the firm - whether it has a hidden connection with a big financial services company, for example. 

6. What follow-up services can I expect? 

After a general financial check-up, it is important your situation is reviewed regularly. Circumstances can change quickly so will there be "after care" and, if so, will it cost extra? 

7. How many advisers do you have? 

It is useful to know how many qualified staff are on hand. You may need urgent advice in the event of a divorce or sudden change in circumstances, so what happens if your regular adviser is away? 

8. Do you specialise in a particular area? 

It may be that you want advice from a specialist "investment" adviser, or from somebody who knows the intricacies of offshore tax shelters. But make sure you choose somebody who is a good all-rounder and who can also cater for more of your everyday needs. Remember, you may think you are an investment expert yourself, but how well versed are you in the different types of life assurance available, or the benefits of single premium pension plans over regular premium policies? 

9. What type of clients do you advise? 

Most IFAs work with a variety of different clients but some specialise more in advising firms or businessmen. Obviously, if it sounds like the firm specialises in the wrong area try another. 

10. Are your systems 2000 compliant? 

Advisers need computers but some systems are unable to recognise the new millennium. You should make sure your records do not disappear down a black hole next year. 

Sunday Times 14 February 1999