Approaching a provider directly for financial advice is rarely recommended.
High street banks or building societies may be approachable, familiar and convenient, but many offer biased product suggestions.
Their products may not be tailored precisely to your needs or may not compare favourably with competitors' deals, though they are unlikely to alert you to this fact.
Shopping around by using resources such as the internet is one solution, but the other is to opt for a financial adviser, who will be familiar with a range of products.
Advisers can help you access the ideal product for your start-up business, but poor advice can be damaging.
Therefore, when seeking financial advice:
- ensure the adviser's firm is recognised by the Financial Services Authority (http://www.fsa.gov.uk/consumer/fcs/index.html):o unauthorised firms are not permitted to charge for insurance or mortgage advice
- check that the adviser is suitably qualified in the relevant fields: o legislation stipulates that advisers must be trained to sufficient levels before conducting business
- opt for an independent adviser:o recent research by the consumer watchdog Which? found that so-called 'tied' advisers, working for a specific lender, typically offered poorer services than independent ones
- decide whether you would rather pay on a fee or commission basis:o commissions can give rise to greed, since advisers may opt for a product that earns them the most, but is free from VATo on the other hand, hourly fees can become more expensive if you have more consultationso good advisers will offer a combination of the two
- ask questions:o ensure you understand recommended products and how they compare to rival productso never sign until all misunderstandings are cleared upo make sure to ask about the terms of redemption, overpayments, underpayments, penalty charges etc
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