Getting financial advice
 Most of us use a method of handling our finances that stretches beyond stashing notes in a mattress. Whether a standard current account from a high street bank, a portfolio of shares, a mortgage or a pension, many of us have at least one financial product. Within the general range of financial products currently on offer, one of the industry's largest areas of growth has been in ethical/socially responsible investment.

You could try to find an ethical fund for yourself but if you are not clear about your financial aims, how much you can afford and the types of product which will best help you achieve those aims, it may be sensible to seek independent ethical financial advice.

 UK financial advice market

Getting financial advice on ethical investments

Questions to ask a financial adviser

The EIRIS Financial Adviser Directory

Links to other organisations


UK financial advice market
Currently there are two main types of authorised financial advisers – tied and independent. Tied advisers are company representatives and can only recommend their company’s products. A tied adviser may typically work for an insurance company, bank or building society. Whereas an independent financial adviser, in theory, should be able to advise on the full range of products on the market.

However the Financial Services Authority (the regulatory body for financial services) is planning to change the financial advice regime so that there will also be "multi-tied" advisers who will be able to advise on a selected range of products.

If you want advice on products from a range of different companies, you will need to see an independent financial adviser (IFA). An IFA is obliged by law to recommend the product most suited to your personal requirements based on factors such as past performance, charges, flexibility and financial security. They may either charge you a fixed fee or they will earn commission on the product they sell you. It is worthwhile checking how they wish to be paid before you consider employing them.

Some financial advisers are called "appointed representatives" of companies or networks of advisers. These may be either tied advisers or independent financial advisers, depending on the type of firm that appoints them. Always check which sort of adviser you are talking to and that they are authorised. The Financial Services Authority (FSA) has a complete list of authorised advisers and firms. For further information the FSA has a useful leaflet - see Links to other organisations below.


 Getting financial advice on ethical investments
Not all financial advisers will have experience or expertise in ethical investment. It is worth checking when you first contact them. Before meeting an adviser it is a good idea think about the ethical issues that are important to you as well as your financial priorities. There are currently more than 50 ethical funds in the UK. Once your adviser has assessed your situation, your finance and your concerns, he or she should be able to recommend a fund or investment route to suit you.

EIRIS IS NOT AUTHORISED TO GIVE FINANCIAL ADVICE

To ensure we continue to provide a useful service we would like your feedback if you use any of the advisers featured in the Directory. Email ethics@eiris.org or write to the Public Information & Advice Manager, 80-84 Bondway, London SW8 1SF -all information will be treated as confidential.


Questions to ask a financial adviser
There are a number of questions you may wish to ask an adviser before accepting or acting on their advice. One tip is to write them down before your meeting so that you can check off each one you ask. Here are some examples:

  • Is it possible for you to speak to two of the adviser's existing clients?
  • How long has the adviser been authorised?
  • Is the firm really independent? (If it is tied to a particular insurance company, for example, it won't be able to advise you about other companies' products).
  • Do the advisers have experience in the area of investment you are interested in? (It's no good going to a mortgage specialist if you want a pension).
  • Does the adviser routinely ask the ethical question of all clients? (whether clients have any ethical concerns they would like to take into account in their investment decisions)
  • How many clients does the adviser have and what proportion of them invest in ethical funds? (400 to 500 clients per individual are the norm but some IFAs may have fewer clients).
  • What will happen if your own individual adviser becomes ill, is away, or leaves? (Will the firm notify you and supply you with an alternative?)
  • How is the adviser paid - by fees or commission? If a client pays a fee, the fee is usually paid for each advice session required. If the adviser relies entirely on commission, they will not earn anything unless you buy one of the products they recommend, when their commission usually comes from the money you pay for the fund or product charges.
  • Does the adviser use Choosing an Ethical Fund, the EIRIS guide for IFAs
  • Is the adviser a member of any ethical investment body? (See Links to other organisations below).

Remember to read the documents you are given, including the small print, before entering into any agreement. If you don't like the adviser, perhaps you find them pushy or evasive, you can always go elsewhere. Satisfy yourself that the adviser has taken enough trouble to get to know your circumstances and needs. If they don't ask you questions, they can't know enough to give you good advice. Don't be afraid to ask questions about anything you do not understand.


The EIRIS Financial Adviser Directory
EIRIS compiles a listing of financial advisers who state they have experience in ethical financial planning. By entering the postcode of the area you choose (where you work or live for example) the Directory will give you the details of the five closest advisers to that area. You can also do an alphabetical search of the Directory.

Click here to enter the Financial Adviser Directory

Links to other organisations

The Financial Services Authority (FSA) is the independent watchdog set up by the Government to regulate financial services and protect consumer rights. It provides information about financial matters on its website. The FSA Consumer Helpline can answer general queries about financial products and tell you if a firm or adviser is authorised. It also publishes guides such as FSA Guide to Financial Advice
FSA Consumer Helpline 0845 606 1234; FSA Leafletline 0800 917 3311 www.fsa.gov.uk

IFA Promotion (IFAP) is an organisation which represents independent financial advisers. IFAP are able to give you the names of IFAs in your local area if you phone them or use their website 'Find an IFA' search. They can list IFAs who have specified ethical investment as one of their top six business areas. Callers will receive a free guide to independent financial advice. Tel 0117 971 1177 www.ifap.org.uk

Ethical Investment Association (EIA) is a nationwide body of IFAs which aims to set standards in the ethical investment industry. They have a directory of members on their website. www.ethicalinvestment.org.uk

UK Social Investment Forum (UKSIF) is the UK's membership network for ethical investment whose primary purpose is to promote socially responsible investment throughout the UK. (EIRIS & EIA are members of UKSIF) www.uksif.org