Are Independent or Restricted Financial Advisors best?
11th December 2014
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Independent Advisors

To be independent, a financial advisor must effectively be free of all ties to companies or markets. What this means is that they have to be able to provide counsel on all investment products from the entire range of providers currently in the market and be completely free of all influences that could mean they don’t recommend the best and most suitable product for you. Not only this, they have to be able to analyse the products and pick out the most suitable for your current needs, given your circumstances, for you to look over and discuss.

As a result of all of this, an independent financial advisor is brilliant if you want an overview of your finances and the best advice on what to do with them, as someone independent will be able to pass on the best and most suitable of all the products available rather than only selected ones.

Restricted financial advisors

These are advisors who are only able to recommend specific types of products on the market or only able to recommend products from specific providers. Some may have both restrictions upon them. While this may sound like a disadvantage, if you are after specific advice, such as on pensions for example, going to a restricted financial advisor may be best as they would be able to give you the best, most relevant and up-to-date advice on the market and the future of your pension.

This could mean, however, that they cover a either a wide limited range of services but are actually only able to recommend a select few products to their customers. In this instance, going to a restricted financial advisor might be limiting as you may not get the most suitable product for you needs/situation. 

How do I know which one I’m going to or that they are a reputable company?

A restricted financial advisor is not allowed to use the term ‘independent’ so that should always be a clue. If you still aren’t sure, phone up and have a chat with them and find out if that particular company is suitable. Check out reviews of the company too as that will help provide an overall picture of the service you can expect.

Check their qualifications as all financial advisors must hold at least a Level 4 (and preferably above) of the national Qualifications and Credit Framework and they must also hold a Statement of Professional Standing. The latter means that hold suitable qualifications and that they have subscribed to a code of ethics. Not only this, but it also means that the individual or company has maintained continued competence and professional development. It’s also important to check that the advisor is registered with the Financial Conduct Authority and that they are approved to offer advice and not just be able to inform of products.

If you need financial advice, contact Carlton Smith Private Wealth IFA to see what independent advice they can offer you. 

About the Author

Jennie W

Member since: 13th November 2014

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