Is My Money Safe With A Financial Adviser?

25^th May 2023

Firstly, you need to make sure that your adviser is authorised and regulated by the Financial Conduct Authority (FCA). You can do this by checking the Financial Services Register.

In the UK, it is illegal to give financial advice without being authorised and regulated by the FCA. Additionally, if you do use an unregulated adviser, you have no protection from the FCA, Financial Ombudsman Service, or Financial Services Compensation Scheme if things go wrong.

The FCA has strict rules that adviser firms must follow such as conducting business with integrity, treating customers fairly, and ensuring the suitability of their advice. However, things can still go wrong, and if you are unhappy with the advice given, you can complain to the advice firm. The advice firm will then investigate the complaint and issue a final response letter.

If you are not satisfied with the final response letter, you can then complain to the Financial Ombudsman Service (FOS). The FOS will investigate your complaint and issue a decision that you can either accept or reject. If you accept their decision, the adviser firm must comply with the ombudsman’s instructions—for example, by paying compensation. For complaints related to acts or omissions by firms on or after April 1^st, 2019, the maximum award limit is £415,000. For complaints relating to acts of omissions before April 1^st, 2019, the limit is £190,000.

If the adviser business is no longer trading then you can get in touch with the Financial Services Compensation Scheme (FSCS). Generally if you are claiming for bad advice regarding pensions/investments, and the advice was given after April 1^st, 2019, you can claim up to £85,000 in compensation. For advice given between January 1^st, 2010, and March 31^st, 2019, this limit is £50,000. The FSCS also covers product providers, and the limits can be viewed on their website.

In conclusion, to ensure the safety of your money with a financial adviser, verify their FCA authorisation, understand the complaint process, and be aware of compensation limits from the Financial Ombudsman and the Financial Services Compensation Scheme.

Related Articles:
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How much does a financial adviser cost?

Financial adviser vs. financial planner – is there a difference?

Is financial advice worth it?

This information is based on our current understanding and is subject to change without notice. This article is for general information only and does not constitute advice.  Whilst information is considered to be true and correct at the date of publication, changes in circumstances, regulation and legislation after the time of publication may impact on the accuracy of the article.

The value of investments and the income from them can go down as well as up and you may not get back the amount originally invested.

HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.

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