CONSUMER AREA
Consumers
Why choose an independent financial adviser?
A key point to bear in mind when you are considering where to go to get financial advice, is that Independent Financial Advisers (IFAs) have no contractual ties to the product providers (such as life insurance companies) whose products they advise on.
In contrast, some other types of advisers, such as 'tied agents' advisers who operate in high street banks, building societies and life insurance companies, have contractual obligations to one or more product providers which means the advice they give is limited to the products of these providers.
IFAs act as the agent of their clients and their independence enables them to research products from across the market.
Tied advisers, on the other hand, act as the agent of the companies' whose products they are selling and can therefore only give you advice on a limited range of products.
Once they have delivered their advice, IFAs must follow this up in writing setting out the reasons why they are giving you that advice.
All financial advisers receive payment for the advice which they are giving and their charges must be clearly set out and explained to you before you receive any advice. This payment may be collected via commission (which is included in the premiums of the product you have bought) or be payment of a fee direct from you. If you chose the fee option, the IFA may be able to rebate some or all of the commission they receive.
IFAs are the only advisers who must (under the regulator's rules) provide you with the option to pay for your advice entirely by fee, rather than taking any commission that the product provider will pay. As such, they give you with more flexibility when it comes to deciding how you want to pay for the advice you receive.
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