People seek financial advice for different reasons and at different times in their lives. Whether it is advice on how to invest an inheritance, help with investing a pension fund or even financial planning for your children or other dependants, getting the right advice from a qualified professional is key to ensuring that the correct decisions are made.
Difference between Advice and Guidance
According to Citizens Advice, financial guidance involves offering information in broad terms about the options that are available to you. Organisations such as charities may also detail the pros and cons of the various financial products but will not recommend any one above the other.
Advisers, on the other hand, are the only people ho can legally offer advice. This involves recommending specific financial products suited to your individual needs. Financial Advisers may be independent or restricted but the Financial Conduct Authority regulates both types giving clients added protection from the Financial Ombudsman Service or the FSCS should things go wrong.
Independent Financial Advisers
By far the most common type of financial adviser in the UK is the Independent Financial Adviser (IFA). As their moniker suggests, these people or organisations are totally independent of any financial institutions, meaning they can offer unbiased advice about products from any provider. IFA’s utilise financial adviser software such as that offered by companies like intelliflo.com to search the entire market for products that will best meet a clients needs.
Restricted Financial Advisers (restricted by products offered)
Certain financial advisers restrict themselves by the products they offer. They may have agreements with one or more product providers and will only offer solutions available from those. This obviously means that you may not always get the best solution for your requirements but on the other hand, their close relationship with the providers may result in deals, or benefits not available to the wider market.
Restricted Financial Advisers (restricted by area of expertise)
Other financial advisers choose to specialise in a defined area such as pensions for instance. These advisers will not be able to offer a holistic financial advice service but may consider products in their specialist area from all providers in the market.
Whichever financial adviser you engage, it is imperative that you check that they possess the correct accreditations and qualifications to do the job legally and effectively.