Getting The Most Out Of Your IFA
If you can't help yourself and you really must use an IFA then you may as well do it properly! One Fool shares his tips on how to deal with them.In Monday's podcast ( Money Talk: How To Be Richer), David Kuo and I spoke with Saran Allot-Davey, an award-winning financial planner or independent financial adviser (IFA). If the IFA industry wanted to select someone to make them look good, they couldn't have chosen a better person.The Fool's take on financial advice is, according to Saran, 'controversial'. That's because we believe you should take control of your own finances. The rules we go by are:The only person you can trust is yourself.Just about everyone else is either selling you something or trying to get as much money out of you as possible. Besides that, we all see time and again that there are useless doctors, lawyers, accountants and even personal finance writers. (No jokes!) Financial advisers are no different. If we learn how to handle our own finances then we have peace of mind that it's been done correctly.It's easy to do it yourself.Most financial decisions are pretty easy; people just need personal finance topics to be explained in plain English. Since the early days, The Fool has always been about jargon-busting.Borrowing, saving, investing, insurance and banking are all things that we can do easily ourselves. We can do it better and more cheaply than if we do it through someone who is trying to sell us something. (There are exceptions where we consider paid-for advice to be appropriate. Even though we have an excellent guide to Wills & Probate, for example, we still suggest you pay to get it done properly.)Where to go for help with your financesAll the information you need can be found in plain English on the Internet. Plus, if you need help with your specific situation, you can get free advice from all sorts of non-commercial sources. Users of our Dealing with Debt board, for example, often speak highly of debt charities, such as National Debtline, CCCS and CAB to name a few.Good discussion boards are often an excellent solution too. This website has a large population of knowledgeable Fools who are all willing to debate your situation till you get the right answer. That's many advisers for free! (That said, nobody is perfect, even the most knowledgeable discussion board posters.)That's why most Fools will say that they happily manage their finances on their own. But I must accept that some of you may still prefer to pay for advice. I think you can split up the reasons to see an IFA into three:1. Get a better dealIf I was ever to use an IFA, this might be why. After choosing the product you want, you could go to an IFA and say something like: "Right, this is the product I want. If you can find the same product for a lower price then I'll pay you something."Let's take a specific example. You might want a stakeholder pension. You've done your research and found a stakeholder pension with a FTSE All-Share tracker that costs 0.7% per year. You could offer the IFA £100 to find a similar stakeholder tracker pension that charges 0.5% or less. If you intend to pay a substantial amount of money into that pension and to keep it for many years, the reduced charge should make up for the fee. You'll want to do your sums though.2. Confirm your strategyOne of the many great suggestions Saran made was that people who are happy with their money strategy may still want a second opinion just to confirm they're on the right track. This idea may appeal to you, but remember that second opinions from our discussion board users cost nothing, and they're free of cross-selling!3. Get adviceMost people should feel confident about making decisions themselves after reading about it in plain English. However, sometimes we may be confused or we need something to be clarified. We may just want help filling out forms (although the CAB might be a good first stop for form-filling).One of the ways that advisers sell their services is to say that if you buy a product under advice then you have better rights to complain and get compensation. However, this isn't always as quick and easy as it sounds, so you shouldn't rely on it blindly.My tips for getting advice:It usually makes sense to pay a fee for your advice. Ensure the adviser isn't getting commission on the sale of a product, as this may influence the adviser's advice.Don't sign anything straight away. Look to see if you can get the same product(s) for a cheaper price on the Web.Confirm the advice using information from the Web, and by asking our discussion board users.If it sounds too good to be true, double check it.Finally, if you don't thoroughly understand the product you're being offered, triple check it! Complex products are usually complex to confuse you and make you part with more money. That's another 'controversial' Foolish viewpoint!> This article is best read in conjunction with the Money Talk: How To Be Richer podcast. Listen to it now for Saran's top ways to get rich and some great tips on choosing an IFA.