Can you have more than one financial adviser?
This article explores the pros and cons of using more than one financial adviser to help you decide the best approach.
Financial advisers can provide expert guidance on important money matters like pensions, investments and tax planning.
But can you work with multiple financial advisers at the same time, or should you stick to just one?
This article explores the pros and cons of using more than one financial adviser to help you decide the best approach.
Summary
There are no rules preventing you from engaging the services of more than one financial adviser
Using multiple advisers can be beneficial if you have a large and complex portfolio
There is no one-size-fits-all answer when it comes to using one financial adviser or multiple
Can you have multiple financial advisers?
The short answer is yes - there are no rules preventing you from engaging the services of more than one financial adviser or advice firm simultaneously.
It is completely legal and accepted to receive advice from multiple sources if you wish.
Many wealthy individuals and those with complex financial affairs will often use a range of specialist advisers rather than relying on just one person or company.
Reasons for using multiple advisers include:
Accessing expertise in different areas (e.g. investments, tax, pensions)
Getting a second opinion on recommendations
Comparing service levels and value for money
Diversifying your adviser relationships
Using separate advisers for different goals/assets
Whether using one or multiple financial advisers is better depends on your individual circumstances and needs.
Let's weigh up the potential pros and cons of taking advice from multiple sources.
Advantages of using multiple advisers
Access to different specialisms
No single adviser can be an expert across all areas of financial planning. By using multiple advisers, you can pick specialists in the specific areas relevant to your situation - e.g. one for retirement, one for estate planning.
Get a second opinion
Receiving advice from different professionals provides an alternative perspective. This can give you confidence that strategies recommended are prudent. A second opinion acts as a sense-check.
Improve chances of best advice
With contrasting viewpoints and solutions offered, you have a better chance of finding the most optimal strategy for your goals and risk tolerance.
Compare costs and value
Getting advice costs from various firms allows you to ensure you're receiving fair value. This competitive tension could save you money in the long run.
Diversify adviser relationships
Using multiple advisers reduces over-reliance or potential conflicts of interest at a single firm. It provides a backstop if you're not satisfied with one adviser's service.
Disadvantages of using multiple advisers
Increased costs and time
Obviously engaging multiple advisers means multiplying any fixed costs or hourly rates you're paying. It's also more time-consuming managing different relationships.
Conflicting advice
You may receive contradictory recommendations from advisers. Then whose advice takes precedence? This could cause confusion or difficulties in your planning.
Communication challenges
Advisers may not effectively communicate or have a blinkered view of your whole financial picture if they are unaware of arrangements with other advisers.
Duplication of effort
You may end up duplicating the same informational requests or paperwork across multiple advice firms, creating unnecessary hassle.
Less accountability
With many separate parts involved, there is less clear end-to-end accountability for the totality of your financial affairs compared to using a single adviser.
Top tips for using multiple advisers
If you decide to use more than one financial adviser, follow these tips to maximise the benefits and minimise the downsides:
1. Coordinate your advisers - Facilitate communication between your advisers to ensure joined-up, consistent advice. Request they share information relevant to your financial plan.
2. Designate lead adviser - Have one adviser take the lead on your overall affairs. This creates clearer oversight and someone ultimately accountable.
3. Define remits - Be clear which areas each adviser is responsible for advising on to prevent overlaps and conflicts.
4. Disclose fully - Tell each adviser about the other professional relationships to avoid conflict issues or blind spots forming in their advice process.
5. Negotiate fair rates - Push for fee discounts based on using multiple advisers from one firm, or leverage better pricing.
6. Review regularly - Periodically take stock of whether each adviser relationship is still necessary and providing value for money.
With some pragmatic coordination and communication, you can gain the advantages of using multiple advisers while avoiding potential pitfalls.
When might multiple advisers be beneficial?
Using multiple advisers can be beneficial if you have a large and complex portfolio spanning different asset types and tax wrappers across multiple jurisdictions.
For example, you may use:
A UK financial planner for managing your domestic tax, investments and retirement planning
A US adviser for managing your American investment accounts and tax obligations
A UK accountant for dealing with business and personal tax affairs
An independent investment manager for managing part of your portfolio
Bringing in advisers to provide specialised guidance as needed can help achieve your goals in a joined-up way.
Those with significant wealth may also choose to have separate advisers for different family members to avoid potential conflicts.
Is one adviser ever better than using multiple?
While some investors benefit from using multiple advisers, others may be better served by having a single, comprehensive financial planning solution.
One adviser could be preferable if:
Your finances are relatively straightforward
You want a fully joined-up financial strategy
You prioritise simplicity and efficiency
Your adviser has multi-disciplinary expertise
You build a strong relationship with one adviser
Working exclusively with a single financial advisor could provide:
Clearer accountability for your overall plan
Simpler coordination as a single point of contact
Integrated strategies across all financial needs
Potentially lower ongoing advice costs
An experienced financial planner from a large firm may offer a one-stop solution spanning investments, pensions, tax planning and estate management.
Finding the right approach for you
There is no one-size-fits-all answer when it comes to using one financial adviser or multiple.
The optimal approach depends on your unique requirements, preferences and the complexity of your personal/financial situation.
Consider factors like:
The breadth of your advice needs
How intricate your financial affairs are
Whether you need specialist expertise
Your budget for professional advice fees
How much time you can spare co-ordinating advisers
How much you personally want to be involved
Most importantly, prioritise working with financial advisers who have appropriate qualifications and experience, robust processes, and who you can build a relationship of trust with over time.
Continuously assess whether your chosen adviser structure is still fit for purpose and delivers value.
The optimal number of advisers may change as your circumstances evolve.
Unbiased can help quickly match you with a qualified financial adviser today.