Frequently Asked Questions
What is an Independent Financial Adviser What happens when I see an IFA How do I know I can trust the advice I receive I know what I want, why should I see an IFA What costs are involved Do I have to buy somethingWhat is an Independent Financial Adviser?
A qualified professional who is regulated by the Financial Services Authority and is legally bound to recommend the most suitable financial products for your individual circumstances. 'Independent' status, as opposed to being a 'tied' agent, allows your adviser to search the thousands of products on the market to find the best one for you without being biased towards any particular company or product.
What happens when I see an IFA?
Financial advisers are legally bound to recommend the most suitable course of action for their client. Therefore, it is important for your financial adviser to know about you. A detailed discussion will enable the adviser to produce a report that will explain your current circumstances and provide you with any recommendations for your future.
Bear in mind also that your circumstances and financial requirements change over the years so it is important to change your plans accordingly. Regular financial reviews with your financial adviser are the best way to keep things up to date.
How do I know I can trust the advice I receive?
Members are strictly regulated by the Financial Services Authority and the Financial Services Act 1986 to ensure that you are given the best advice available from fully qualified advisers. The regulations also require that the adviser undergoes regular compliance checks and ongoing training to keep him up to date and prove that they are up to date with changes in the industry and competent to give advice.
I know what I want, why should I see an IFA?
There are literally thousands of financial products and hundreds of companies and financial institutions that offer them.
Many companies and even high street names now offer 'direct' services that offer you the chance to buy insurance, savings or investments over the telephone or by post. However, buying financial services is far more complicated than buying something like a new television or three-piece suite and making the wrong choice could prove costly. Can you be sure that you are buying the right product just because you recognise the brand name?
An independent financial adviser has the training, knowledge and expertise to narrow the field sufficiently for you to buy with confidence.
What costs are involved?
Financial advisers work in one of two ways.
Fee based - a fee is agreed with you in advance. This may be a one-off charge or an hourly rate.
Commission based - the company you purchase a product from pays commission to the adviser. The amount received will always be declared to you in advance.
Some advisers may offer you the choice of which method you prefer or offer a combination of the above.
Do I have to buy something?
No. You are never obliged to follow the advice you receive.
However, product providers want to sell their products and will often offer enhanced rates or discounts to independent financial advisers. So you not only benefit from the advice, you may end up saving money!