Getting the best advice will reap the rewards

Just as solicitors ought to be consulted on legal matters and doctors on medical, so professionally qualified financial advisers and brokers should guide on money matters.

Such a person should help you plan, source a range of products, advise on any complicated aspects and safeguard your interests. They owe a duty of care to the client, not the provider.

Financial advisers fit into one of three categories:

n independent, who should be unbiased and can recommend the most appropriate action to take and products right across the spectrum (known as IFAs);

n tied, who can recommend only the products of one provider;

n multi-tied, who can offer products only from specific providers

You can pay for such advice on a fee basis, rely on commission generated from sales to remunerate the adviser or part fee-part rebated commission. Currently 80 per cent of advisers are paid through commission.

All advisers are regulated by the Financial Services Authority. It acts against those who break the rules.

By December 2012 the FSA wants to have a clearer demarcation between IFAs and other advisers. It also aims to stop providers deciding on the level of commission.

It is all too cosy for a company with an in-house but 'independent' sales team to encourage its products to be favoured.

For a truly independent view, only ever choose an IFA and, if they are employed by a company with potential products, seek a firm assurance that they will totally disregard such influences.

Seek a financial planner with the right qualifications. Look for Chartered (requiring 10 advanced financial planning exams to be passed) or Certified status (achieved at a lesser level but assessed on that technical knowledge in practice) – or both!

To find such an individual, check initially for local names with the Chartered Insurance Institute and Institute of Financial Planning respectively.

Ask about their experience, specialisation (such as tax planning or retirement) and if the planner will implement or refer on.

A third organisation – the Chartered Institute for Securities and Investments – offers qualifications whose members specialise in investing. Formed in 1992, it has 40,000 members in 89 countries.

Usually advisers seek your tolerance or attitude to risk on a scale of one (low) to five (high) or use a psychometric questionnaire. Tim Brear, a director and Certified Financial Planner at Harrogate based Brook-Dobson Brear, says the first question should be: "How will you assess my need for risk?"

A lifetime cash flow analysis should be conducted.

"Making investment decisions without this vital planning is akin to setting off on an orienteering competition without reading the map – you know that you can run fast but have only a rough idea how fast you need to run and where the control is," says Mr Brear.

Balancing a portfolio – not only in terms of geographical spread but by sector – is only part of a good adviser's work. Clearly the investment needs to be geared to the age of the individual/couple and whether they require more income or growth.

Repeating your circumstances to a new staff member every few years is not ideal and therefore seek an organisation where a relationship of trust can be built up.

Don't be afraid to ask who will specifically work for you and if they have ever been publicly disciplined for any unlawful or unethical practice.

"Madoff feeder funds and Lehman structured products are just two examples of what can go wrong," says David Wells, HSBC Head of Investments, Pensions and Strategy. The bank has 1,100 financial advisers with 300 IFAs and the balance tied.

Agree the basis of remuneration including if payment is time or project related and, if fee based, on the scale of charges.

For hourly rates, expect to pay 200 for a Chartered or Certified planner, 100 for analyst/researcher and 75 for administrator.

Decide if you want an advisory or discretionary approach. With the latter, the adviser makes the investment decisions. In order that there is no possible conflict of interest, Government ministers are among those who seek the latter course.

Apart from meetings at least six-monthly, expect a financial adviser to be pro-active. This can be by newsletters, telephone calls or simply emails, alerting to a new product (such as JP Morgan's Brazilian Investment Trust) or financial area.

For insurance, look for a firm belonging to the British Insurance Brokers' Association to gain the best professional advice with the most suitable policy.

Just three typical examples show the benefits of using a BIBA member:

n client had fire loss where insurer tried to reduce the settlement to 6,500 on basis not all damage was caused by fire but broker disproved this and secured 30,000 instead;

n death in service claim for 400,000 rejected but paid in full after broker negotiation;

n following a flood, loss adjuster tried to deduct wear and tear from whole claim but broker explained this was incorrect and immediately made a revised upper offer.

In such instances, the expert understands the product details and client's rights. Policy wording can be complicated, notably on capital additions and defective workmanship.

Without advice, clients can also fail to claim their full entitlement, such as loss of income.

A price comparison website sounds a cheaper option but it may limit the range of companies to those who fund it and may not take circumstances into account, forcing everyone into a straitjacket.

A website will not pick up on aggregate discounting where a provider reduces the premium if an additional product is or has been purchased, such as LV= (formerly Liverpool Victoria).

BIBA member Oval Insurance Broking helped Jenny Symon recently to replace her lost watch. Wakefield-based Mrs Symon has had buildings and contents cover through Oval for some years. She lost her 1,550 watch between her home and car and through speed and advice from Oval was able to have the insurer pay the jeweller of her choice for a replacement.

A broker will find the right provider such as where higher value contents need to be insured or a second property. No website can comment on the relative claims approaches taken by different providers whilst this is known in great detail by BIBA members.

n Contacts: Blue Wealth 0844 5499199, Brook-Dobson Brear 01423 877280, Oval Insurance Broking 01924 433119.

Guidance on the road to retirement

Ray and Jill Everitt from Sheffield, were introduced to independent financial adviser Raj Shah of Blue Wealth through their mortgage broker three years ago.

Jill recently retired as an English teacher and Ray retires this summer as deputy head at High Storrs School in Sheffield.

Raj has been working on a strategy to ensure their income reduction does not impact too much and advised on a tax-efficient savings route.

Funds chosen include Invesco Perpetual Income and Jupiter Merlin Balanced Portfolio.

"I wouldn't have anyone else," says Jill.

"Raj gives genuinely independent advice with the pros and cons," says Ray. The couple, both 57, pay Blue Wealth on a fee basis.

Raj Shah holds stockbroking qualifications and is working towards Chartered status.