When investors are looking for an independent financial adviser, they often turn to the Internet to aid in their search.
If you don’t have a friend, family member or colleague who has had recent experience of a great IFA, this route to finding an adviser can make real sense.
At the very least, it offers a way to identify a short list of local advisers who you can meet and ask lots of questions about their proposition, experience, qualifications and charges.
It is widely understood that independent financial advice is the gold standard of financial advice, as the adviser is impartial and acts in the best interests of their client, rather than in their own best interests or on behalf of a product provider.
One of the most popular (if not the most popular) websites for finding a local IFA is Unbiased.co.uk.
As a result of changes to financial advice being introduced on 31st December 2012, in the form of the Retail Distribution Review, Unbiased.co.uk is going to allow some non-independent financial advisers to join their service.
In addition to independent financial advisers, Unbiased.co.uk will be listing some restricted financial advisers; those who are restricted whole of market advisers.
It is worth noting that this is not a regulated definition of financial advice. The FSA will only distinguish between independent financial advisers and those who fail to meet the standards of independence, and are therefore ‘restricted’.
The decision by Unbiased.co.uk to admit some restricted advisers risks confusing investors who are searching for unbiased advice.
Some restricted advisers will be able to recommend products from the whole of market, but will be restricted because they only advise on a limited range of product types.
Others will be restricted by both providers and product types. Some will be restricted to a limited number of products from a limited number of providers.
Until you ‘check under the hood’, it could be very difficult to understand the nature of your restricted financial adviser – there will be many (although maybe not as many as 50) shades of restricted advice.
All of this reinforces the importance of using an independent financial adviser rather than a restricted adviser.
The new definition of independent financial advice is advice which is unbiased and unrestricted, and based on a comprehensive and fair analysis of the relevant market. The FSA explains that independent financial advice is designed to reflect the idea of a genuinely independent adviser being free from any restrictions that could impact on their ability to recommend whatever is best for the customer.
You simply don’t get this with any shade of restricted advice.
Whilst Unbiased.co.uk will be ensuring restricted whole of market advisers are clearly labelled as such, investors and their professional advisers will need to take great care to ensure they are dealing with an independent financial adviser who has their best interests at heart.
Do speak to us to arrange a meeting with Independent Financial Adviser at Informed Choice. We offer an initial meeting at our expense and with no obligation, which is a great opportunity to find out how we can help you to build, manage and protect your wealth.
Photo credit: Flickr/Unbiased
