If you’re considering talking to a financial adviser, you’re likely weighing up whether it’s worth the cost. On one hand, they can help you navigate the complex world of investments, pensions, and financial planning. On the other hand, not every experience with a financial adviser is a smooth one. Let’s break down the potential pitfalls of using a financial adviser—and why we think the benefits outweigh the risks.

What Can Go Wrong When Using a Financial Adviser?

1. High Fees

Financial advice doesn’t come cheap. Advisers often charge a percentage of your portfolio, an hourly rate, or a fixed fee for their services. Over time, these fees can eat into your returns.

The Positive Side:
A good adviser can more than make up for their fees by helping you avoid costly mistakes and identifying opportunities you might not have spotted on your own. If their advice increases your returns or ensures you meet your financial goals, the fees may be well worth it. They can also look at fees across the products and funds you are invested in to find the best value and make sure you are using the right tax strategy.

2. Conflict of Interest

Some advisers may steer you toward products that earn them a commission or are tied to their firm’s partnerships, rather than the best option for you. Not all advice firms are independent, including some of the biggest companies.

The Positive Side:
The UK’s regulatory framework has strong protections in place. Independent financial advisers (IFAs) are legally required to recommend products from the whole market, ensuring you’re not limited to a narrow range of options. Plus, if you choose an adviser with transparent, fee-based pricing, you can minimise the risk of biased advice. You can find FMB’s brochure with a full explanation of our charges on the website www.finman.co.uk

3. Poor or Inappropriate Advice

Not all advisers are created equal. Some may lack the expertise to handle complex situations or may not take the time to fully understand your needs. A good question to ask, is “how many clients do you have?” There are only so many hours in a day!

The Positive Side:
You can mitigate this risk by choosing a well-qualified adviser. Look for someone who is regulated by the Financial Conduct Authority (FCA), has the right qualifications, experience and comes with strong client reviews. It’s also a good idea to talk to a few advisers to find one who feels like the right fit.

4. Over-Promising and Under-Delivering

Some advisers may paint overly rosy pictures of potential returns, leaving you disappointed when reality doesn’t match the sales pitch.

The Positive Side:
A reputable adviser will manage your expectations realistically and build a plan based on achievable goals. Ask for a clear explanation of the assumptions behind their projections, and beware of anyone promising “guaranteed” high returns. At FMB we look carefully at the kind of risk you are comfortable with and use cashflow modelling software to project ahead taking to account disaster scenarios such as a market crash or loss of an income.

5. Feeling Out of Control

Handing over your finances to someone else can sometimes feel like you’ve lost control of your money. We hear this a lot and we understand your concerns.

The Positive Side:
A good adviser works collaboratively with you, ensuring you stay informed and engaged. They should empower you to make decisions with confidence rather than taking the reins entirely. Regular updates and clear communication are key. At FMB we have some clients who like a great deal of input and others who prefer to delegate everything to us entirely, but the relationship is always based on what you feel comfortable with.

It Could Be Worth It

While there are risks to using a financial adviser, many people find that the benefits far outweigh the downsides. A great adviser can:

• Help you save time and reduce stress by managing complex financial matters.
• Provide tailored strategies to grow your wealth and achieve your goals.
• Keep you disciplined, ensuring you stick to your plan rather than reacting emotionally to market changes.
• Offer peace of mind, knowing your finances are in expert hands.

Finally, using a financial adviser in the UK isn’t a decision to take lightly, but it can be a game-changer for your financial future. Do your research: check qualifications, understand their fee structure, and ensure they are company you can deal with. When you find the right adviser, you’ll have a trusted partner to guide you through life’s financial twists and turns—and that can be priceless.

The value of your investment can go down as well as up and you may not get back the full amount you invested.