We take our independence very seriously. This is why we are directly authorised by the Financial Services Authority and have no ties to any banks, insurance companies or investment managers. We act for our clients and all that we do professionally is aimed at delivering their financial goals in the most efficient and cost effective manner.
Some financial advisers and wealth managers try to blur the distinctions between what they do and true independent financial advisers. We have therefore set out below a short set of questions and answers which should make the differences very clear.
What are the differences between Independent Financial Advisers and those who work for Banks and Insurance Companies?
Question: Who does an insurance company salesman work for?
Answer: The insurance company
Question: Who does an independent financial adviser work for?
You. They are your agent, not that of any provider. This is actively monitored by the regulator.
Question: What products can an insurance company salesman sell?
Answer: Only those of the insurance company (and now sometimes products from a limited range of other companies).
Question: What products do independent financial advisers sell?
Answer: Whatever is available on the market. They are required by the regulator to justify their provider and product recommendations and this is actively monitored.
Question: What can an insurance company salesman do when his products under perform?
Question: What can an independent financial adviser do when his products under perform?
Answer: If necessary, assist you to dispose of them and find something else from the whole of the market out there.
Question: What advice can an insurance company salesman legally give you about products from other companies?
Answer: None. If you have an existing portfolio they cannot monitor it or comment on it since they are not qualified to do so. What do you do with that policy that you bought 20 years ago from XYZ Life? Well don’t ask the current salesman from St. Jades. He can’t advise you on this, although he may try to make out he can.
Question: What advice can independent financial advisers give you about all of the products on the market?
Answer: Whatever you need to know.
Question: What can an insurance company salesman do when he doesn’t have a product that matches your need?
Answer: Nothing – well actually he can refer you to an independent financial adviser.
Question: What can an independent financial adviser do when he doesn’t have a product that matches your need?
Answer: N/A He has the whole market to choose from.
The above has only considered product selection. Actually good independent financial advisers do a great deal more. A good IFA will not start to talk about products or even begin to think about them until he has found out about your values and financial goals and established your current position.