While most of us will need a mortgage, a pension, and various types of insurance, it can be quite daunting choosing from the wide range of financial products without the right expertise. With more complex areas of finance, such as investments and estate planning, professional advice from a qualified expert is often essential.
An independent financial adviser (IFA) can typically support you in any of these scenarios. Below we look in depth at how an IFA can help you, what to look for when you hire one, and how to find the most suitable professional for your needs.
What is an independent financial adviser?
Independent Financial Advisers provide completely unbiased advice about all financial products from every possible finance firm. They can help provide you with a holistic view of your options within the particular financial niche you’re looking at, and make recommendations on their suitability.
It’s important that you understand the distinction between a financial adviser and an independent financial adviser when looking for advice. The 'independent' part of their title means that you can be certain they will look at every potential option available to you.
A financial adviser, while not often overtly referred to as a ‘restricted adviser’ would be legally required to tell you that they are restricted when you ask. This type of financial adviser can only recommend certain products or providers, meaning you won’t get a complete picture of every option available.
Financial guidance Vs. financial advice
Another important distinction is between financial advice and financial guidance. Financial guidance is often provided by charity organisations, and while it may be helpful to some people, those offering guidance cannot recommend a product for you, as they are not registered to do so.
Financial advisers are regulated by the Financial Conduct Authority (FCA). This means that recommendations can be made about specific products and which provider offers them.
We will only match you with an IFA who is 100% independent, has all of the right qualifications and a track record of helping customers just like you.
What services do they offer?
To add another level of complexity, not all financial advisers use that title. Often they are named depending on the area of finance they specialise in, for example, mortgage broker, insurance broker, investment planner.
The key difference, however, remains the same: for example, an independent mortgage broker can recommend products from the whole mortgage market, a restricted mortgage broker may be tied to a particular bank or ‘pool’ of lenders.
Those professionals using the title ‘IFA’ can typically provide advice across all areas of finance, rather than specialising in just one. They can be particularly helpful if you need help in more than one of the following areas, as they can look at your entire finances holistically:
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Mortgages, Equity release and commercial property finance
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Pensions, pension transfers, annuities and other retirement planning
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General insurance: buildings and contents, car insurance, travel insurance
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Protection insurance: life insurance, critical illness cover, income protection
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Investments, savings and shares
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Financial or tax planning, including inheritance tax
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Life changes: Starting a family, divorce, receipt of redundancy or inheritance funds
How to choose an IFA
When it comes to choosing the right type of IFA, it depends what you need them for. If you’re looking for advice in one specific area of finance, it may be best to opt for an independent pensions adviser, for example.
However, if you’re looking for help with multiple financial products at the same time, which is often the case as many financial services are intrinsically linked to each other, it’s best to use an all round independent financial adviser. They will be able to look at your broader financial circumstances and make recommendations in multiple areas, which often leads to a more profitable overall result.
Once you’ve decided whether you need an IFA with a specialism or more general financial advice, be sure to consider the following:
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Check that your adviser is FCA registered by finding their listing on the Financial Services Register
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Ensure they are truly ‘independent’ you can ask them, and check their status on the Financial Services Register
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Make sure that you are absolutely clear on their fee structure and how much you will be charged by the end of the first meeting
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Lastly, do you get along with and trust your chosen IFA? While they are bound to regulations which put your best interests at heart, it’s crucial that you feel comfortable with the person dealing with your personal finances
Alternatively, you can cut out all of the above steps and have us match you with an IFA we have fully vetted, cross-checked their qualifications, and scrutinised their track record. Get started below:
Connect with an independent financial adviser today
What fees should you expect?
Independent financial advisers charge fees in a variety of ways, depending on the type of service provided, and the type of firm they work for. This can be helpful when distinguishing between guidance and advice. Guidance is typically free, but professional financial advice will always be chargeable, typically in one of the following ways:
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At an hourly rate
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With a fixed fee quoted when you agree the work involved
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At a fixed percentage of the investment, or product value
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On a monthly retainer (usually for ongoing support such as wealth management)
The IFAs we work with never charge a fee upfront and will be 100% transparent about the cost of their services during your free initial chat.
What qualifications should your adviser have?
All financial advisers must have Level 4 or above of the national Qualifications and Credit Framework. They may also have additional qualifications within any specialist areas of advice, such as equity release.
They must also be registered with the FCA and have a Statement of Professional Standing (SPS) available. This document confirms they adhere to a code of ethics and complete at least 35 hours of professional training each year.
We have vetted all of the IFAs we work with to ensure they have the correct qualifications, but we are more than happy for you to do your own research into them, for your own peace of mind.
Should you use a local IFA?
For some areas of financial advice, it can be beneficial to use a local IFA. For example, if you’re looking to buy commercial property in the capital, an independent financial adviser in London may be more helpful than one based in Birmingham, as they would likely have insight into the local property market.
However, that said, most IFAs can provide advice regardless of location. The most important thing is that they are qualified and registered, with the right knowledge to act on your behalf.
To get matched with the best independent financial adviser for your needs and circumstances today, speak to a member of our helpful team - get started here.
FAQs
In many areas you won’t necessarily have to use a financial adviser, you can choose to go directly to the financial service provider of your choice, whether that’s a mortgage lender, investment firm or pension provider.
However, when it comes to something as important as your financial future, even the most cautious spenders can see the value in seeking expert advice for complex financial products. In many cases a small investment in expert knowledge now will result in greater gains in the future.