Independent or restricted financial adviser?

With the financial advice industry there is plenty of merger and acquisition taking place at the moment and smaller firms are being bought out by larger consolidators. Given this, we thought it might be useful to recap on the types of service and remit your financial advisor can provide.

Broadly speaking there are two types of advisers: independent and restricted.

Independent Financial Adviser

An Independent Financial Adviser (IFA) is a financial professional who is able to offer advice on a wide range of financial products and providers. They have no ties to any particular company or product, and must provide their clients with unbiased and objective advice.

Restricted Adviser

A Restricted Adviser can only recommend products, investment solutions and services from a specific group of companies. Potentially, this could just be for one company.

Which is right for you?

All advisers have to have the same minimum qualifications to be able to provide advice. Most financial advisers, restricted and independent, go further than the minimum and often gain Chartered status.

Most advisers, both restricted and independent, advise on the same areas of planning and provide a holistic approach to advice.

There is often no difference in charges between restricted or independent advisers either.

The main difference between an Independent Financial Adviser and a Restricted Adviser is the scope of their advice. IFAs are able to offer a wider range of products and providers. Restricted Advisers are limited to a specific set of products or companies.

It is up to you to decide which type is right for you when choosing an adviser. Do you feel a restricted adviser can suit your needs or would you prefer an independent approach? However, the distinction between the two is not always clear. It is important, as with any purchase, when buying financial advice to fully understand the proposition and remit of the adviser form you are choosing. If in doubt, just ask. Our financial advisers are here to help.

Choosing an IFA over a Restricted Adviser can provide greater choice and flexibility. However, it’s important to consider each adviser’s specific qualifications, experience, and expertise, as well as their fees and charges, before making a decision.