Consumer rights: Where to go for a helping hand with your cash

If you’re giving your finances a spring clean and need advice, make sure the adviser fits the bill.

Are you having problems paying the post-festive season bills? Or are you lucky enough to have money to squirrel away and no idea how to get the best return on it? You might expect anyone who offers any sort of money advice to be able to help with anything to do with money. But it’s a case of horses for courses when it comes to finances and you need to be careful that you don’t back the wrong one. Complex money matters need a range of skills and expertise and it isn’t always easy to know where to find the right person for the job.

If you have some money to save or invest and don’t feel you’ve the knowledge to do it yourself you’ll probably have to pay for advice. If you don’t have any money and need help to get out of a financial fix go for the free advice options.

Retail investment products - stock market-based investments such as unit trusts where the return on your money isn’t guaranteed, life policies, annuities and pensions - are the domain of financial advisers. Since last year advisers selling these products can’t take commission from the companies whose products they sell. They have to work out their own fees for the services they offer and agree those with you before giving you any advice.

You should be able to have confidence that you’re getting the best advice for you rather than the adviser giving you biased advice in order to get the best commission. The rules apply to advisers who operate independently and to advisers in banks, building societies and insurance companies who sell the products of those organisations.

Advisers must tell you whether the advice they give is independent or restricted. An adviser claiming to give independent advice must be genuinely free to recommend the best product for you. Restricted advisers will look at a narrower range of products and may specialise in a particular type of product such as pensions, or be tied to one or more providers and advise only on their products.

Financial advisers must also be qualified, subscribe to a code of ethics and keep their knowledge up-to-date. Check their qualifications and fees first.

Some banks and building societies that used to offer financial advice have switched to an “information only” service which won’t ask questions about your personal circumstances and won’t be able to assess which products are suitable for you. This might seem like a good option because there’s no fee but if you buy a financial product without advice you have less protection if the product turns out to be unsuitable for you or you lose money. You will only be talked through the bank or building society’s own products – not products from the whole market. And the advice provider will still take a fee out of the money you invest. Ask what that fee will be so that you can compare it against the cost of getting other advice.

The rules on regulated investments don’t apply to the sale of cash savings products, like general insurance, life insurance or mortgages – unless they are sold to you at the same time.

The Money Advice Service website has a lot of useful information on managing your money and finding the right advisers, and www.unbiased.co.uk has details of thousands of advisers. There is free advice available from Citizens Advice Bureaux on many high streets, and you can also get help from National Debtline on 0808 808 4000, and online from Step Change . Mymoneysteps.org is an interactive online tool on how to manage your money and make a budget. Taxaid on www.taxaid.org.uk and Tax Help for Older People give help on tax to people on low incomes.

So don’t stick your head in the sand and ignore impending problems. The sooner you get help the easier it will be to get back on a firm financial footing.

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Q: I’ve decided 2014 is the year I finally open my own business and my partner and I have found premises for a coffee shop. We want to make it a real community resource and use local suppliers. We feel we’ve got our heads around the finances and legalities, but do we need to be VAT- registered? KC, Manchester

A: This is a decision you can put off until you see how well the business does. You don’t need to register for VAT until your income is at a level at which you think you will have made more than the threshold figure in the past 12 months. So if in December 2014 your figures are indicating that you’re likely to make £79,000 in the 12 months between January 2014 and January 2015 it’s time to register.

If the products you sell are exempt from VAT you can’t register but if you sell any on which VAT is added to the price you can choose to register. If you don’t register you won’t be able to claim back any VAT you pay on goods you buy in.

Food and drink for human consumption is, in general, zero-rated but many items are standard-rated, including alcoholic drinks, crisps and snacks and hot food – lots of which your cafe might sell. See http://www.hmrc.gov.uk/vat/start/index.htm for more information, and the VAT helpline is on 0300 200 3700.