Most people seek out a financial adviser who can provide the best advice for their individual needs and circumstances. A good financial adviser will provide the most appropriate advice, but what they recommend will be influenced by the range of products they have access to.
Whole of market
An independent financial adviser has access to the whole of the market. These advisers can examine products from a range of companies and providers, meaning that there is a greater chance of finding a product that is tailored most closely to a customer’s requirements.
Restricted financial advice
Advisers that are described as ‘restricted’ or ‘tied’, means that the range of products they can advise on is limited in some way. They are still capable of finding the ideal product for their customers, but the choice available to them is limited.
Advisers may be restricted in different ways. A classic example of restricted advice might be if you visit a bank or building society. The range of financial products they offer will generally come from one provider or a small selection of providers. Advisers working there cannot advise on anything that is not offered by their employer, and the financial adviser software they use will most likely be tailored to those restrictions.
Another example, perhaps, is an adviser in an investment firm who might only be able to advise on products that are managed by his company. Advisers who are qualified and specialise in certain product types may therefore only be regulated for the purpose of advising on those products, and therefore are also considered to be restricted.
Choosing a financial adviser
Understanding whether a financial adviser is either independent or restricted is a key checkpoint when looking for advice. Look at the adviser’s disclaimer carefully to see whether the range of products they can advise on is restricted, and if so, how it is restricted. Check their qualifications and credentials, and in particular, whether they are regulated by the Financial Conduct Authority. Ask about their services, and whether their Financial adviser software provides the support you need as a customer, through client portals, for example.
Advisers should, in their first meeting, make the scope of their advice clear, so you can be sure of finding the right financial relationship for your needs.