Val asks:

I have retired and have some capital that I am frequently switching between savings accounts to obtain the most interest. I contacted a top financial advisor in order to get better results and save hassle. He wanted to charge me £3,700, plus 3/4% a year, in addition to the interest from the companies as an annual fee.

He would not say what companies he recommended, but wanted me to put all my money into my current account and go to him to reinvest. He indicated the likely returns which did not sound much better than my own method, so I decided not to bother. He also wanted me to come to the second meeting (the first was fairly standard sales blurb) with all the money transferred into a deposit account ready to go into the investment accounts he had chosen. I was unhappy that he wouldn't tell me where he intended to invest the money so I could do some checks myself.

Since this man was featured in a money magazine it has left me without confidence in financial advisers and the charges seem phenomenal. I also wanted to try some share dealing for some of my money via an agent since I do not have experience of this and I don't know where to start. Any ideas please?

You have raised a very pertinent question - all advisers work and charge in very different ways. Some will charge a percentage of the money they are investing for you, both as an initial fee and then on an ongoing basis with the ongoing fee, often going up to 1% pa. Whereas others will charge set fees.

Advisers also differ in how they invest funds. Some will develop their own investment and some will outsource this to investment houses. The danger of going to an adviser who will not earn anything unless you sign up and they get paid commission is that they need to 'sell' you something to get paid. I am sure the adviser you met with was unwilling to tell you where the monies would be invested due to the risk that you could take the information and go do it yourself and they would not have got paid.

I am surprised that you were expected to attend a second meeting to 'sign up' and transfer over your money when it does not sound as though you really delved into your objectives or needs at the first meeting - I would have expected a review of where you were now and a suggested strategy and discussion of the options available to you, leaving the decision for you to make and probably a third meeting to go through the paperwork once you had said you wanted to proceed.

You may be better to seek out an adviser who will give you a fixed fee for set pieces of work - so they could provide you with an investment strategy and make a recommendation. You could ask them to implement it for you or opt for a lower fee and implement it yourself. Again you do not have to have regular reviews - they can be useful but only if they are adding value - if your circumstances are fairly stable you may be better dipping in and out of a review service or meeting your adviser every two to three years. Not all firms will be able to accommodate such variety but if you identify what you want from

Not all firms will be able to accommodate such variety but if you identify what you want from them it will enable you to find one that suits more easily.

Overall it worries me that you are considering a leap from cash savings to stocks and shares - that is a big jump in terms of the investment risk.

Funds, such as unit trusts, oeics, collectives etc. are a lower risk alternative. This way your money is combined with investments from other investors and the fund manager invests in stocks and shares and potentially other assets too. The advantage is that your money is spread more widely, giving greater diversification and hopefully lower risk. There are various fund supermarkets that allow you to invest directly in a huge selection of different funds.

If you did want to invest directly in shares using the services of a stockbroker to recommend holdings you would need to look for an advisory service. Most brokers have minimum investment sizes and management charges to cover the tax reporting. Of course you could use an online dealing service to keep costs as low as possible and pick your own shares.

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