- 24th April 2019
- Posted by: Celticfp
- Category: Financial Planning
It’s a common question, what are the benefits of independent financial advice? Well hopefully here are some points about how it can keep you and your family on the right financial track. Many of us will face possibly several big financial decisions during our lifetime, whether it’s deciding how best to maximise our retirement income, or where how best to invest regular savings.
Working out the best financial track for you can be difficult, which is why many people seek professional financial advice on the various routes available. We have always believed passionately that the benefits of independent financial advice outway any other option for our clients; that’s why we choose to be independent despite the extra work.
First of all let’s consider what a financial planner does
A financial planner is someone who helps you manage your finances, so if your looking to save money, make money or protect your money, then they can point you in the right direction and explain the best options available.
There are two main types of financial adviser, ‘restricted’ and ‘independent’. If an adviser is restricted, they may either specialise in a specific area, such as investments, or they may only be able to recommend products from a certain number of providers – it’s important if your shopping around you establish how an adviser is restricted. If they are independent, they can recommend a whole host of different products from across the whole of the market.
Independent financial advisers, the key benefits
Independent advisory firms provide personalised and unbiased financial advice to their clients, many of whom have complex financial needs. This can include pension carry forward calculations to maximise contributions to complex trust and inheritance tax planning.
Because these types of advisers are independent, they are not tied to any particular product provider, bank, fund manager or investment company. They are held to the highest standard of care and are required to act in the best interests of their clients at all times.
Why does it matter if your adviser is independent?
Clients with complex needs are increasingly seeking out personalised face to face advice – and one way to ensure you’re getting that is to work with an independent financial adviser. Benefits of working with an independent financial adviser include personalised guidance based on your entire financial picture, that for example doesn’t just focus on the money you have to invest today, but building a long term understanding of your situation and tailoring advice based on your goals now and into the future.
Restricted Advice vs. Independent Financial Advice in Summary
The current regulatory environment has provided a distinct line between advisers that are Independent and those that are Restricted. Using the definition and explanation provided by the Regulator (the Financial Conduct Authority – FCA, see www.fca.org.uk):
The Independent Adviser will provide independent advice and is able to consider and recommend all types of retail investment products that could meet your needs and objectives. Independent advisers will also consider products from all firms across the market, and have to give unbiased and unrestricted advice.
A restricted adviser or firm can only recommend certain products, product providers, or both.
The adviser or firm has to clearly explain the nature of the restriction. If you are not sure you should ask for further information, but some examples of restricted advice are where:
- The adviser works with one product provider and only considers products that company offers.
- The adviser considers products from several – but not all – product providers.
- The adviser can recommend one or some types of products, but not all retail investment products.
- The adviser has chosen to focus on a particular market, such as pensions, and considers products from all providers within that market.
Restricted advisers and firms cannot describe the advice they offer as ‘independent’. All financial advisers have to make it very clear to you what status they have.
You can contact one of our independent financial advisers for a free initial consultation, we take pride in making sure our clients are on the right financial track.
This Article is for information purposes only – should not be perceived as financial advice. We recommend you should always speak to a financial adviser before making any financial decisions.