Denise Delaney

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Denise Delaney Consumer Information 3 December
2008
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Getting Financial Advice
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What will we cover in this talk?

• The aim of this talk is to help you to
• Understand the different types of advisor their
  services
• Choose the most suitable advisor for your needs
• Ask the right questions so that you get the most
  from the advice.

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How can financial advice benefit me?

• A qualified and experienced advisor can
• Help you understand your own needs, plan ahead
  and become more financially secure
• Save you money and time by shopping around on
  your behalf
• Help you understand the risks involved in certain
  financial products
• Recommend the most suitable products for your
  needs.

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What types of financial decisions can an advisor
help me with?

• Saving, investing and general financial planning
• Protecting you and your family against loss of
  income if you become ill or die
• Getting a mortgage
• Releasing equity in your home
• Dealing with the financial effects of separating
  or getting a divorce
• Planning for retirement
• Planning for inheritance.

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Who gives financial advice?

• Advisors who work in banks or insurance companies
  they generally advise on and sell their own
  products.
• Intermediaries they will advise on and sell
  products from a number of financial services
  firms.
• Both types must be authorised by the Financial
  Regulator.

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How can I check if an advisor is authorised?

• Contact our Registers on
• 1890 200 469
• Log onto www.financialregulator.ie,
• look under Regulated Firms

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Are there different types of advisors?

• The authorised status of the advisor tells you
  the type and range of financial advice they are
  allowed to offer and how many firms that they
  deal with.
• Tied Agent can offer advice on products from
  one financial services firm
• Multi-Agency Intermediary can offer advice from
  a number of financial services firms
• Authorised Advisors can offer advice from all
  financial services firms.
• Mixed Status one type of advisor for some
  products and another type for other products.

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Cost of advice

• An advisor can be paid by
• Salary employed by a bank or insurance company
• Commission receives payment from a financial
  services firm when they sell the firms product
• Fees you pay the advisor
• A mixture of the above.
• Remember no advice is free.

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Commission

• There are different types of commissions
• Initial Commission a percentage of your
  investment is paid to the advisor.
• Renewal Commission yearly percentage of your
  regular investment or lump sum.
• Fund-Based Commission yearly percentage of the
  overall value of your fund.

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How does the commission affect me?

• It is usually built into the overall cost of your
  product.
• On investment and pension products the commission
  is built into the charges you pay the provider
  this can impact on the value of your fund.

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How do I know that my advisor wont just sell the
products of the firms that give the most
commission?

• An authorised financial advisor is obliged to act
  in your best interest.
• They must explain why they recommend a product
  and give you the reasons why in writing.

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Negotiating fees/commissions

• Ask the advisor if he will negotiate
  fees/commissions.
• For a flat fee he may pass on to you the value of
  some or all of the commission.
• Or he may accept less commission and therefore
  more of your initial investment is invested in
  the fund.
• Tied agents may have less flexibility to
  negotiate as their fees/commissions are often
  fixed.

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Shop around for an advisor

• Contact us for a list of advisors in your area.
• Talk to two or three advisors before choosing
  one.
• Ask about their services and what type of advice
  they give.
• Find out how many firms they deal with for the
  type of products you are looking for.
• Ask how he gets paid.
• Are they experienced.
• Do you know someone who has already used this
  advisor?

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In advance of your meeting

• Be clear about what you want.
• Do your research - our info. can help.
• Prepare a list of questions.
• Gather information , e.g. proof of identity,
  address, income, loans, mortgages, investments,
  insurance policies, work pensions, etc.

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At the meeting

• Be honest. The advice you are given will be based
  on the information you provide.
• Take notes.
• Ask questions.
• Take your time.
• Dont sign anything unless you have read it and
  understand it all. Dont forget the small print.

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Getting the best advice

• The advice he gives you will depend on the info.
  you have given him.
• If he advises you to buy a product he has to give
  you a written statement of the reasons why that
  product is most suitable.

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What information must your advisor give you?

• The first time you deal with an advisor he must
  give you his Terms of Business, this will
  include
• Details of his business, his authorisation
  status, a description of services provided
• If he is tied to one firm
• His direct charges, this does not include
  commissions he receives
• Details of his complaints procedures
• Details of a compensation scheme he is a member
  of.

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Questions to ask your advisor all products

• How does this product meet my needs?
• What are the charges? How do the compare?
• Are the charges ongoing or once-off?
• What happens if I miss a regular payment?
• What, is any, ongoing service can I expect from
  you if you get a commission?

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Questions to ask your advisor Investments
pensions

• What are the main risks?
• Is my investment or any growth on my investment
  secure?
• What is the minimum recommended term of the
  investment?
• If I cash in my investment early, will I have to
  pay a penalty?
• Will the investment affect my tax or Social
  Welfare payments?
• How will I find out how my investment or pension
  is performing?

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Questions to ask your advisor Life general
insurance

• What am I covered for and for how long?
• Is this cover necessary for any reason?
• Could the premium increase for any reason?
• When could my claim be refused?

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Questions to ask your advisor Mortgages

• What are the monthly payments over different
  terms?
• If interest rates were to rise how much extra
  would I have to pay?
• Can I pay a lump sum or extra each month if I
  want to?
• Do you charge a fee if I dont take your mortgage
  offer?
• Can I pay off early without having to pay a
  penalty?

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Dos and donts

• Do use a regulated advisor
• Do talk to a few before choosing one
• Do prepare for your advice meeting
• Do give your advisor the info. he needs
• Do ask if he can give you overall financial
  planning advice
• Do read all documents
• Do ask how his recommendation is suitable
• Do ask about charges
• Do negotiate on fees and commissions.

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Dos and Donts

• Dont sign anything unless you have read it and
  you understand it
• Dont rush into anything.
• Dont cash in an existing pension, life insurance
  policy or investment for a new product unless he
  can show you in writing why its a good idea.
• Dont give inaccurate or incomplete info.
• Dont accept info. verbally get it in writing.

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To find out more, read

• Read our information booklet Getting Financial
  Advice.
• Log onto www.financialregulator.ie.
• Ring Registers on 1890 200 469.

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Consumer Contact Detailswww.itsyourmoney.ieCo
nsumer Helpline 1890 77 77 77consumerinfo_at_ifsra.i
eInformation Centre, 6/8 College Green, Dublin
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Thank you

• Any questions?