Do you need to pay for personal advice?

Companies are not allowed to give personal advice to their employees. They can provide information- some companies may provide comprehensive information, others only provide an outline.

If there’s something you’re not sure about, it’s sensible to start by asking the company, or the share plan administrator appointed by the company, for more information or explanation. Inevitably, though, however helpful they want to be, there may come a point where they have to say that if you are not sure what to do you should contact your own professional adviser.

The trouble is, most employees don’t have an adviser, don’t know how to get one, may not have time to go through the processes required to engage an adviser before the deadline by when action has to be taken and/or may feel the adviser’s fees are disproportionately high.

Not all advisers will take on individuals as clients because getting a person set up as a client can cost more than the person is prepared to pay for the advice they want. The Government has recognised this and referred to it as ‘the advice gap’. In due course, some Government-backed solutions may be developed, although initially these may be aimed at decisions around pensions and financial planning and may not cover share plans.

Not all advisers know very much about share plans, although they won’t always need very specific share plans knowledge in order to help you.

In putting this website together, we are hoping to help with the ‘advice gap’. We hope that some people will be able to find the information they need to answer their questions and make their own informed decisions. But others may decide to pay for an adviser – good advice can help you make the best choices, may save you money and may give you peace of mind.

What kinds of advisers are out there?

It can be a bit bewildering to find the right person to help you. If you are lucky, there may be someone you trust who can provide you with some suggestions.

You may decide you need a financial adviser. Here is a link to the Money Advice Service information on choosing a financial adviser: https://www.moneyadviceservice.org.uk/en/articles/choosing-a-financial-adviser

(You will find there is lots of other useful information on the Money Advice Service website, it’s worth having a look to see what else is there).

Financial advisers may offer services ranging from general financial planning and investment advice to more specialist advice, such as the suitability of a particular product, such as an ISA or pension.

A financial adviser is likely to go through the risks of having too much of your money tied up in one place (for instance, shares in your company can fall in value) and the benefits of spreading the risk by having a range of investments suitable for your circumstances.

If you are confident about your overall financial position, but have a specific tax or legal question, then you may decide to go for a specialist tax or legal adviser, such as an accountant or solicitor.

Some companies that operate share plans mention in the information they provide to their employees that they may find this website helpful if they are trying to find an adviser who can help them: https://www.unbiased.co.uk

Here is a link to the Law Society’s information on working with a solicitor: http://www.lawsociety.org.uk/for-the-public/using-a-solicitor/working-with-a-solicitor/

Here is a link to a website that has information about choosing an accountant or tax adviser to help you: http://www.ccab.org.uk/ChoosingAccountantTaxAdviser.php

Your adviser will be required to complete some initial ‘know your client’ checks and take-on procedures before they can help you. Knowing what to expect and being well-prepared can save time and therefore money.

What to expect

  • the adviser will normally need you to enter into a client agreement with them, setting out what they are going to do, what they will charge and so on. This will probably include a limit on their liability. It should also say where you can go for help if you are not satisfied- most professionals have to explain this.
  • the adviser will need to confirm your identity and perform anti-money-laundering checks. This will take less time if you are prepared beforehand.
  • if you are looking for financial advice, the adviser will need to understand how the share plan fits in with your other arrangements- for instance, do you have any other investments, how much do you and your family earn, what financial commitments do you have?
  • the adviser’s diary may be busy, so you may have to work together to find a time to meet. Only so much can be done on the phone or by email.

What preparation can you do?

  • get ready the client identification documents they tell you they will need (e.g. passport, driving licence, utility bill).
  • (unless you are just seeking limited advice on a specific point), remind yourself about your assets and liabilities and any important life-events when you will need money, or when you expect to have access to money. If you use a financial adviser, they may have a form for you to complete to help with this.

What kind of questions might you want to ask before you choose your adviser?

  • what know your client and anti-money laundering information will you need to provide?
  • how much will the advice cost?
  • what qualifications and experience does the adviser have?
  • does the adviser offer a first consultation free of charge?
  • is the adviser fully independent?
  • what come back do you have if something isn’t right?
  • is there anything you can be preparing in advance?
  • have they advised on something similar before?
  • how soon will you be able to have their advice?