When choosing a Financial Adviser, it’s important to understand what type of service you’re looking for. Professional Financial Advisers fall under two categories – ‘independent’ or ‘restricted’ and each offer a different range and type of service. What does this mean to you?
Financial Advisers – Independent vs Restricted advice.
All financial advisers have to be authorised and regulated by the Financial Conduct Authority (FCA). Regardless of whether they are independent or restricted, they must hold minimum qualifications, subscribe to a code of ethics and keep up to date with the financial markets through continuing professional development.
Independent Financial Advice / Advisers
Independent Advisers are not restricted with regard to the products and services they can offer. They can advise in all areas of Financial Planning however in some specialist areas, advisers are required to have specialist qualifications in order to hold license to give that advice.
To be called ‘independent’, an Independent Adviser must be able to offer services and solutions from the ‘Whole of Market’ and offer unbiased advice. From 1st January 2013, they must offer investment services which are paid for by a fee as Independent Advisers can no longer receive commissions for Investment Advice.
Some (but not all) Independent Financial Advisers offer a free initial consultation. This can be invaluable as without obligation, it offers the consumer the chance to ascertain:
- If they like the person they are speaking with
- If they feel confident in the adviser’s abilities to deal with their affairs
- What the potential costs will be for chargeable services, when the charges will apply and what the options are for paying them
Restricted Financial Advice / Advisers
Restricted advice means that the adviser you are talking to may be limited to offering advice in certain areas. They may not be able to give advice on complex matters that require the services of a specialist consultant or one with specific industry qualifications. Most will only be able to offer product solutions from a limited range of providers or in some cases a single provider.
The best example of a restricted adviser may be someone representing a Bank, Building Society or Insurance company acting on an employed basis and only being able to offer the services that are offered by that particular institution.
With such restrictions in place, a restricted adviser may not be able to offer advice on some of your existing investments, pensions and policies that are held with other providers or those that fall outside permitted advice areas. The investment products offered will undoubtedly be the best they are able to offer but may not necessarily be the best product solution when considered alongside the rest of the market
To arrange a consultation or to speak with one of our advisers, please visit our contact page or call us on 0800 055 6963.