Without knowing how to choose a financial advisor, many of us ask friends or family for a recommendation, or go to the bank or building society we have always dealt with.

You can get financial advice from:

• Tied agents who advise and sell products from a financial services firm they are tied to. They still have to give you a product that is suitable for your needs, but they cannot shop around on your behalf.
• Multi-agency intermediaries, such as investment brokers, advise on and sell products from a number of financial services firms.
• Authorised advisors are obliged to consider relevant products from all financial services in the market.
• A mortgage broker acts as an intermediary between you and mortgage lenders when you are applying for a mortgage. They usually work with a number of mortgage providers. Before you decide to use a mortgage broker, ask about any fees and charges for using their service. You can get a list of authorised mortgage brokers from the Central Bank's registers website.

The first time you deal with a financial advisor they must give you their ‘Terms of Business', which explains their authorised status and a description of the services they offer. It will also explain whether they are tied to one financial services firm for any products they advise on.

Mixed status

The number of firms an advisor deals with may vary from one type of product to another. For example, a financial advisor might offer pensions and investments from six financial services firms, but may be tied to one insurance company when selling home insurance.

Check if your advisor is authorised

Not everyone who calls themselves a financial advisor is authorised to give you financial advice. Some may even be working illegally. You can check whether an advisor is authorised by checking the Central Bank’s registers website.

Always make sure that the advisor you use is authorised to give financial advice before handing over your money or signing any agreement. If they aren't regulated and things go wrong, you may not have access to complaints procedures and compensation schemes. For example, the Financial Services Ombudsman cannot investigate complaints against an unauthorised firm or advisor.

All financial advisors that are authorised have to meet the requirements of the Central Bank’s Consumer Protection Code when dealing with you.

It is important that you take some time before choosing an advisor and look at all your options. You want to be confident that you choose the right type of advisor to help you make important financial decisions.

You need to find an advisor who

• Is authorised
• Listens to you and answers questions openly
• Has experience of situations like yours
• Is willing to take time with you and does not put you under pressure
• May be willing to negotiate fees and commission so you are happy with what you are paying
• Gives you advice on a wide range of products to suit your needs.
  

Steps to take when choosing an advisor:

• Get the list of authorised advisors in your area from the Central Bank's registers website or call 01 224 4000
• Talk to a few advisors over the phone or in person before choosing one
• Ask them about their services and what type of advice they can give you
• Find out how many financial services firms they deal with for the type of product you may need
• Ask how they get paid - is it by fees, commission or a mixture of both?
• Make a decision based on the advisors experience - have they dealt with situations like yours and can they give you the advice you need?