I need help managing my £1million nest egg but I don’t trust financial advisers – how can I pick a good one?

I’ve managed my own investments and savings so far, and am now in a position where I think I need help to manage my money.

I have managed to build my savings to £850,000 fully invested in a cash ISA and £150,000 in a single company shares. I am also mortgage-free.

I have a big trust issue, certainly around people, money and the fact that I don’t understand financial adviser’s fees.

I know I need some help with the financial planning going forward, and would like to get a financial adviser who is trustworthy and transparent on the fees they charge.

How can I find a financial adviser who is trustworthy with their advice, the fees they charge and that I can work with? D.N via email

Higher returns: Investing in professional financial advice can help you to grow your savings in the most effective way

Harvey Dorset of This is Money replies: Managing your money can be a daunting prospect, especially when you have a large amount saved up.

Luckily, it appears you have been overseeing your savings well so far.

On the other hand, it is not so easy to take the advice of others readily – especially if you struggle to trust them.

Adding in the fact that you say you don’t understand adviser fees, it is understandable that you are loathe to take the plunge for fear of being ripped off, even though you know you need help.

In terms of trust, your best bet is to ensure that the adviser you choose is regulated by the Financial Conduct Authority (FCA). This means that the adviser will have completed certain qualifications such as the Certified Financial Planner qualifications.

When finding the adviser that is right for you, it is worth considering what specialism you need. In your case, this might be investing, but you could also choose an adviser specialising in pensions if you intend to focus on planning for the future.

Andrew Smith, independent financial adviser at Flying Colours, replies: Firstly, well done on saving such a large nest egg. It’s clear that you’ve worked hard to get to where you are now, and most likely made some sacrifices along the way.

That said, I’m willing to bet that if you’d worked with a financial adviser at the start of your investing life your liquid assets would be worth a lot more than they are today.

While you’ve probably kept your wealth management costs low with cash ISAs, over the years your wealth will have generated very low returns. In addition, you have significant cash savings, and while interest rates look quite appealing at present, too much cash is likely to overexpose your savings to the impacts of inflation, which erodes their buying power.

Inheritance: Andrew Smith says a financial adviser can ensure that you pass on as much of your wealth to your children as possible

Holding individual shares on the other hand, can offer attractive returns. However, they are high risk, and may not be best for your long-term financial planning. 

A significant drop in the value of these shares as you approach retirement could be detrimental to your quality of life in those golden years.

I also suspect that the wealth you may want to pass on after you die will be subject to inheritance tax. If you want your loved ones to inherit as much as possible, and not the taxman, a good financial adviser would be best placed to help you.

The good news is that it’s not too late to get significant value from financial planning now. A good financial adviser will help you understand your financial goals and aspirations from the outset.

You need to feel comfortable with volunteering personal information, so be prepared to spend some time getting a ‘feel’ for the adviser. Ultimately, you may be working together for many years, so it’s important that you have mutual respect and enjoy each other’s company!

In terms of finding a reputable adviser, the good news is that the regulatory environment for advisers today is of a much higher standard than was the case of 30-40 years ago. 

All advisers are required to achieve certain professional standards by the FCA. This is the regulator which regulates advisers and their firms in the UK.

In terms of finding a financial adviser, I would suggest that you ask friends, family and colleagues who they would recommend, or perhaps ask your solicitor or accountant. Alternatively, online directories such as Unbiased and VouchedFor will verify financial advisers and share reviews from their clients. For further reassurance, you can check the FCA register.

In terms of fees, these should be clearly set out and agreed before any work is carried out on your behalf. I’d recommend you question the adviser not just on their fees, but what value you’re likely to receive in exchange. They ought to be able to demonstrate how, with their advice and guidance, your wealth will grow at a higher rate than the fees you will be charged.

Having said that, value comes in other forms, not just in pounds and pence. A good financial adviser will look to align your financial plan to your requirements, objectives and risk profile. This should help you feel secure and confident that you will achieve your financial goals, which is why a strong, long-term relationship with an adviser you can trust, is essential.

Karen Barrett, founder and chief executive of Unbiased replies: It appears that you’re financially comfortable but unsure of whether you’re getting the most out of your money.

For example, while you can currently get generous rates in a low-risk cash ISA, you could potentially supercharge your returns by having a diversified investment portfolio.

You could also look at your existing £150,000 single company investment and consider whether you should diversify and invest in more than one firm.

Transparency: Karen Barrett says an adviser should explain what fees you should expect to pay from the outset

One of the best ways to boost your finances is by getting advice from an expert.

While it can be daunting getting financial advice, it’s worthwhile to get the most out of your money, whether you’re hoping to optimise your investments or planning for retirement.

It can also be helpful when you are estate planning or accessing your pension, so you avoid a hefty tax bill..

FCA-regulated advisers must deliver their services to a high standard, and if you’re unhappy, you can complain to the Financial Services Ombudsman.

When you seek financial advice, you’ll be charged a fixed fee, hourly fee or a percentage of your assets, or a mix, depending on what you need support for.

For example, a fixed fee may apply when you set up an annuity, while an hourly fee (£150 per hour on average) may be charged for quick jobs such as moving investments.

If you want an adviser to manage your investment portfolio over a long period of time, you’ll likely be charged a percentage of the portfolio’s overall value.

An adviser should give you a clear outline of what fees to expect before you take financial advice – and it should be more valuable than not taking advice at all.