A lot has been written particularly in the tabloid money pages about how one should go about finding the right financial advice.

I decided that my first blog would provide an industry insider's view, with the aim of helping customers filter out the important factors from the noise.

Do I need a financial adviser?

Many people feel that they are totally out of their depth when dealing with all but the most basic of financial matters. Very few are confident enough to act as their own adviser, and finding the time to do the research is a problem for many.

A significant factor has been successive governments using financial products as a means of promoting their policies and image as "pro-savings" or "pro-pensions", resulting in unnecessarily complex products.

An example of this is the Individual Savings Account (ISA), which replaced Personal Equity Plans (PEPs) and Tax Exempt Special Savings Accounts (TESSAs) in 2001. Both previous products were incredibly successful in encouraging saving and investing through the use of tax-free versions of well known financial products (unit trusts and bank accounts). However Gordon Brown's desire to make his mark on the UK savings and investment landscape created a product that in my experience few investors really understand, even having purchased these products.

Another reason why self-advising is so difficult the Inland Revenue's constant tinkering with the rules to raise taxation or offer tax incentives. There has been 3 major changes to pensions rules since the "Pensions Simplification" act in 2006 aligned the 7 previous pensions regimes into a single (massive) set of common rules. This continuously shifting landscape makes it difficult for the public to understand financial products, and as a result there is a low level of trust.

Of course, financial advisers are faced with the same issues too. The difference is that they are working daily with these products, have access to excellent technical resources, and know where to look for help.

So once you have identified a need for advice, what is important in choosing an adviser?

1. Make sure that they are independent

The number one most important factor is ensuring that the adviser can deal with the whole market. Look for an Independent Financial Adviser (IFA) displaying the blue Independent logo. Many people still fail to grasp the difference between advisers that can only offer the products from a single provider of financial products, known as "tied" advisers, and IFAs that operate on a whole of market basis. Most High Street banks and many estate agents can only offer tied advice, and most but not all advisers in their own businesses are independent.

Why does this matter?

Well put it in the context of buying a car: if you walk into the local main dealer's showroom he will do his best to sell you one of his shiny new cars. What he won't tell you is whether a competing brand up the road offers a better product or one more suited to your needs.

But what about brand loyalty?

This is all well and good for short term purchases like clothes or cars that have a maximum 3-5 year life expectancy, but when you are buying a lifelong financial product or service it is important to consider the whether the provider is financially strong enough to be around when you want your money back. An IFA will take into account the Financial Strength rating, which is an assessment of the company's financial resources and ability to weather the storm, and often includes ratings for their service and administration too. Ask this, your adviser should be able to tell you.

My adviser tells me that although the products are from one company, the funds are run by independent investment management groups. Isn't this just as good?

Absolutely not. Going back to the car dealer analogy, this is being told that you can have absolutely any colour you want from the entire spectrum. Does this change what's under the bonnet? Of course not. There are many other factors in play such as product charges and the flexibility of the product in case your needs or situation changes. An IFA will use his skills, research systems and experience to shop around for you.

And don't be discouraged by tied advisers telling you that there is no way an IFA can know all the products in the market. Of course they can't, but a good adviser will pay several thousand pounds a year for research systems to filter the choices and find the best solution for you.

But he/she's such a nice man/woman.

Oh, please...

2. Make sure that you have the option to pay by fees as well as commission.

Being offered a choice as to how the advice is paid for can determine whether the adviser offers you products from the whole market, or just those that pay him/her a commission. Fee-based advice should mean truly unbiased advice, but can also mean that you are paying the adviser to do a job whether you subsequently take his advice or not.

A good adviser will offer a "modular" fee structure that separates the cost of advice from the cost of putting the recommendations into place. This means that each stage of the process can be costed separately making it clearer for clients and easier if you decide to pull out part way through.

But is commission-based advice necessarily bad or biased advice? Since commission disclosure rules were put in place in 1994 it has been a legal requirement that at the point of sale the adviser must make a written disclosure of the product charges and commission. The level of commission can usually be set by the adviser and this will be reflected in the product charges that you pay. Consequently a good adviser, even if working on commission, will normally agree the level of charges with you at an early stage of the discussions and be totally open about the charges.

Should it turn out that the advice, product or service you need does not provide any commission a good adviser will discuss this with you and try to agree a means of covering the cost of the work on a mutually agreeable basis.

In summary, commission-based advice is not the demon that the financial media seems to think it is because, if used fairly, can provide access to financial advice for those that can't afford to pay fees. Until December 2012 you will still be able to pay for advice through product charges, and this is an important choice for many people who cannot afford to pay for advice out of their own pockets. When commission is banned the challenge will be how to offer services that are both affordable for the client and profitable for the adviser.

3. Ask for recommendations

Look at the adviser's website or business directories such as Freeindex for feedback from past clients. If there aren't any ask the adviser for references from clients he or she has worked for recently.

4. Check the adviser's qualifications and specialisations

Before doing so you need to have an idea whether you need specialised or general advice, and the Financial Services Authority's Money Advice Service website contains loads of really useful guides.

Currently the minimum qualification is the Certificate in Financial Planning, which is a legal requirement. New rules from 2012 will raise this to level 4 Diploma standard. You may also come across advisers who are "Chartered" financial planners and this is currently the gold standard in advice.

However such specialisation comes at a price. You will need to judge whether you need to pay a highly qualified adviser or will a general practitioner do just as well, in the same way thay you would when appointing a solicitor to provide legal advice. For example there is no specialisation required for savings advice, life assurance, or switching from one personal pension to another. However if you need advice on whether to move money from a company pension you really should look for an IFA with the G60 qualification or higher.

Some areas of advice including occupational pension transfers and opt-outs, equity release, home reversion and long-term care fees planning do require the adviser to have additional qualifications, so if in doubt ask!

5. Make sure that you receive all the documents that you are supposed to get

At the start of the advice process you should be given a written statement of the firm's regulatory status, charges, and service, called the "Keyfacts about our Services and Costs", as well as their terms and conditions document. Some advisers have produced more customer-friendly versions of these but they should contain all the necessary information to tell you about the service you should receive and what it will cost, as well as what to do if things go wrong such as who to complain to and how to contact the Financial Ombudsman. Don't be discouraged from reading these documents: they form a legal agreement between you and the adviser and could commit you to fees.

During the advice process, you should also receive documents for the financial product that is being proposed for you. The Key Features document explains all about the product features and charges and this is also backed up by a personalised illustration, or Key Investor Information Document (KIID) for ISAs and unit trusts. Remember that you are in control of the process and if things aren't going as you expect, and you don't get a satisfactory explanation, you have the right to decide not to go ahead.

Hopefully this advice will help you to select someone that will become a trusted lifelong adviser for you.

Top tips

In summary:

• Make sure that you are dealing with an Independent Financial Adviser
• Check that there are payment options that suit your needs and budget
• Ask for recommendations
• Check their qualifications and specialisations
• Get all the documents you need