The financial advice sector is driven by its clients’ financial goals – which often involves making the most of money and preparing for retirement. For those looking to secure their financial future, financial advisers can help in guiding your decision making – based on your individual financial situation.

However, sometimes, there are advisers who put their own needs above those of their clients. They’re interested in their own financial gains – but that can come at the expense of clients reaching their financial goals.

While independent organisations, such as the FCA in the UK, offer some protection and restrictions, their capacity to defend against unethical advice given to people living abroad is frequently constrained.

 

 

Different types of financial advisers

Financial advisers may also go by other names depending on their area of expertise, such as financial planners or mortgage, investment, or pension advisers.

In the UK, all financial advisers are required to be licensed by the Financial Conduct Authority (FCA) and hold a Level 4 qualification in financial advice that has been approved by the FCA. Some financial advisors additionally hold Chartered or Certified Financial Planner certifications.

There are two primary categories of financial advisers when it comes to the variety of advice they offer:

1.    Market-wide advisers

Instead of being limited to specific financial products and/or providers, whole-market financial advisers can offer guidance on the entire industry's financial products and service providers.

They can claim to be independent financial advisers (IFAs), since they provide unbiased guidance based on in-depth analyses of the entire market, free from the influence of product manufacturers. To strengthen the transparency of how they are compensated, IFAs have been prohibited from receiving commission on investment and pension products since 2012 and are instead required to charge clients a fee instead (more on this later).

They can still receive commissions from some mortgage, equity release and insurance companies though. The majority of the time, commission is received from the customer's premiums or other payments.

1.    Restricted advisers

As the name implies, these financial advisers have chosen to restrict their proposition to one of the following:

• A small number of products (such as mortgages)
• Items from a small number of suppliers (such as a limited set of fund managers)

Legally, restricted advisers aren’t permitted to identify as independent.

However, using a limited ‘whole of market’ adviser who can advise on products from all providers, but is only allowed to provide pension advice, is not always a bad idea.

 

How ‘the bill’ is being picked up

In the financial advice world, once someone has been misled by a rogue adviser, the good advisers try their best to regain any lost trust and build back that relationship. They do this as it can be hard to get someone to let their guard down after being misled.

As good advisers, we pick up the ‘bill’ by trying our very best to find a solution that is right for your situations and if we can’t, we will try our hardest to offer you the best advice we possibly can for your next steps.

For more information on how we can help you find the best solution for your situation, book an appointment with us.

Disclaimer: Whateley Wealth Management is not responsible for any external site content.

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