The Questions That Actually Tell You Whether Your Adviser Is Any Good

Financial advice has been found to add significant value to your wealth over time. But how do you make sure you hire a good advisor?

Not every financial adviser is worth what they charge, and the only way to find out before you’ve handed over access to your finances is to ask the right questions upfront. Here’s the list I’d actually use, and why each one matters.

“Financial adviser” is not a protected title. Anyone can put it on a business card. What is protected is the authorisation to give regulated advice, which sits with the Financial Conduct Authority, and the extra qualifications some advisers choose to earn on top of the legal minimum. So before you ask a single question about investment strategy, there are two you need answered first, because if the answers are wrong, nothing else matters.

Before anything else: are they even qualified to be having this conversation

Ask whether they’re authorised by the FCA, then go and check it yourself on the Financial Services Register (register.fca.org.uk). It takes two minutes, and it’s free. You’re looking for the adviser’s status as “Authorised,” and it’s worth checking whether there’s any disciplinary history attached to their name.
Then ask: independent or restricted?

An independent adviser can recommend products from anywhere in the market. A restricted one can only pick from a limited panel, sometimes a single provider’s range. Restricted isn’t automatically a red flag; some restricted firms are genuinely excellent in their niche, but you want to know which one you’re getting, because it changes how much of the market they’ve actually searched before recommending something to you.

Finally, ask what they’re qualified to do beyond the legal minimum. Every UK adviser needs a Level 4 Diploma to practise at all. Chartered Financial Planner status, awarded by the Chartered Insurance Institute, is the higher bar, and it’s held by a minority of advisers. Not having it doesn’t mean someone is bad at their job. But if two advisers are otherwise similar, this is a reasonable tiebreaker.

The money question, asked properly

“How do you get paid, and what’s the total cost?” is the right question, but push for a number, not a description. Advisers are legally required to disclose charges in writing before you become a client, and they typically fall into one of three structures: an hourly rate, a flat fee for a specific piece of work, or an ongoing percentage of the amount they manage for you, commonly somewhere in the region of half a percent to just under two percent a year, on top of any product and platform costs.

If two percent sounds small, it’s not. That money, not invested to grow your wealth, will usually add up to significant amounts over time.

If someone tells you there’s “no fee” because they’re taking a cut from the product instead, that’s not free advice. That’s advice with the cost hidden from you, and I’d walk.

The questions on strategy and risk

“How would you describe your investment strategy and how actively do you manage portfolios?” You want to know whether an adviser is checking your portfolio because markets moved, or because a calendar told them to. What you’re listening for is whether they can explain the logic behind their rhythm, rather than reciting a company line. Ask them why they follow that pattern and what actions they’d usually take on the back of it.

“How do you determine my risk level, and how do you distinguish between my ability to take risk and my willingness to take risk?” The FCA’s own rulebook requires advisers to separate two things: your attitude to risk, which is psychological- how you feel about seeing your investments fall, and your capacity for loss, which is financial- whether you could actually absorb a fall without it damaging your life.

The regulator has repeatedly found advice files where the two get muddled into one score, and when it flagged serious failings in retirement income advice, this exact confusion was named as a recurring problem. A good adviser keeps these separate, and if your capacity to absorb a loss is lower than your appetite for risk, the capacity for loss should be the one that wins.

Some advisers go a step further and add a third measure, sometimes called risk need, which is simply the minimum return you actually require to hit your goals. If your target retirement income requires real growth, a cautious risk profile might not get you there, and a good adviser should flag that issue rather than building you a “safe” portfolio that won’t do the job.
“What would the investment process look like from here?” and “can you give me an example of when you changed a client’s portfolio and why?” These two work together. The first tells you what’s supposed to happen. The second tells you whether it’s ever actually deviated from a template in response to a real person’s real circumstances changing.

The one question people forget to ask

“What happens to me and my investments if you retire, leave the firm, or can’t work for a period of time?” A financial advice relationship can easily run for twenty or thirty years, and it’s worth knowing upfront whether you’re tied to one individual or to a firm with a proper handover plan. A solo adviser isn’t automatically a problem, but if that’s what you’re getting, ask what the contingency actually looks like on paper, not just “someone would take over.”
The question that does the most work

“What would make you a better adviser for me than a low-cost platform and a diversified index portfolio?” is, in my opinion, the single best question on the list, because a good adviser should be able to answer it without getting defensive.

There’s real research behind why the answer often isn’t “nothing.” Analysis by the International Longevity Centre UK, with Royal London, tracked people who took financial advice between 2001 and 2006 and found they were on average around £47,700 better off a decade later than similar people who didn’t, with the gain proportionally larger for people on more modest incomes than for the already wealthy.

It’s an older cohort and the industry has changed since, so I wouldn’t treat it as gospel, but the direction of the finding lines up with what I see in practice: the value isn’t usually in picking better investments than an index tracker would. It’s in the decisions around the investments, the tax wrapper you use, the pension contribution you make before a deadline, the behaviour you’re talked out of when markets fall and panic sets in. If an adviser can’t articulate that specifically, in terms of your situation, that’s worth noticing.

What to watch out for

Paying for financial advice doesn’t guarantee good financial advice. The title isn’t protected, the quality varies enormously between firms, and the person recommended to you by your bank or introduced at a dinner party might be excellent or might be mediocre, and you have no way of knowing which without asking. A list of questions like this one isn’t a nice-to-have.

It’s the only real check you have before you hand someone access to your entire financial life.

It’s also worth noting that just because someone recommends an adviser doesn’t necessarily mean they’re right for you.

They may have been a great fit for that person and their particular circumstances, but everyone’s situation is different. Ultimately, you should do your own research and make the decision based on what’s right for you

This is general information to help you think through the process, not personal financial advice, and it isn’t a recommendation to use or avoid any particular adviser or firm. If you’re weighing up whether to take advice, you can book an exploratory, non-committal 15-minute discovery call here.