What is an Independent Financial Adviser?

There are currently three main ways of seeking financial advice for products such as life assurance, pensions and collective investments like unit trusts/OEICs, Individual Savings Accounts and Child Trust Funds; either through an independent financial adviser, a multi tied agent or a tied agent.

Independent Financial Advisers

Independent Financial Advisers (IFAs) offer unbiased financial advice to their clients and recommend the most suitable products, if any, after researching the whole market. The key differentiator is that they act on your behalf and will offer you the option of paying by a fee, as well as the option of paying by commission.

Tied Agents

Tied Agents can only advise on the products of one provider.

Multi-Tied Agents

Multi-Tied Agentsare financial advisers allowed to recommend the products of a limited selection of providers, rather than just one.

Many people buy financial products through multi-tied or single-tied agents, such as the sales staff who work at their bank or building society. When they want a pension or investment product they often find it easier just to nip into their bank and accept what is sold through that organisation's relationship with one or a few financial product providers. The person providing you with product information are acting on behalf of the company they are employed by or have a tied relationship with. Many people buy products this way, usually because they feel more comfortable buying from a big name organisation and assuming, sometimes incorrectly, that they are bound to get a good deal. What they are actually getting is limited information from a small selection of products.

The benefits of Independent Financial Advice

The big advantage of independent financial advice is that you have access to all the products on the market through a qualified practitioner. An IFA's job is to research and recommend the most appropriate financial solutions after asking their clients a whole range of detailed questions about their circumstances, their financial goals and their attitudes to risk. IFAs are answerable to the FSA to ensure that they keep to the rules. As they act on your behalf they provide personalised written reasons why they have recommended particular products or a course of action.

The above information does not constitute financial advice from Bartholomew Hawkins Ltd or any of its representatives. Investment performance can go down as well as up. Past performance is no guarantee to future performance. Your home may be at risk if you do not keep up the repayments for any loan secured against it. All information is based upon our interpretation of current legislation and taxation which can change in the future.