What’s the difference between an IFA and a non-independent advisor?

A financial advisor can help you grow and protect your wealth, and they fall into two main types: independent financial advisors (IFAs) and non-independent ones, sometimes known as a restricted advisors. For truly independent and expert advice, consult Endeavour Financial Planning.

What is a restricted advisor?

Financial advisors, as well as giving advice, can offer financial products such as investments, savings and insurance.

A restricted advisor, as the title indicates, has a limited number of products that he or she can offer their clients. Often, a restricted advisor works with one financial firm, such as a bank. Other restricted advisors may be able to offer a range of financial products, but from a limited number of companies.

Some advisors may focus on one area of finance, such as pensions, but can recommend products in that area from a wide range of providers.

A restricted advisor may provide good advice, but we would recommend the use of an IFA in order to get the best financial products for your individual circumstance.

Financial guidance

Some people use the title of ‘financial advisor’, but only offer guidance without recommending any products. They can provide general information about a few investment products, but will leave it up to the client to choose which one.

Financial guidance may be useful, but there is a chance that the advisor will not be regulated by the Financial Ombudsman Service or the Financial Services Compensation Scheme. This means that if you receive bad or misleading advice, there may be no means of redress.

Financial guidance may be cheaper than using an IFA, but we would argue that you will not be paying for the best service.

Independent financial advice

An independent financial advisor is able to recommend a number of products. They can access the whole of the financial market in order to match the best product to the client’s individual situation.

An independent financial advisor will have knowledge of all financial areas, including investments, savings, insurance, pensions, tax planning and family estate management.

An IFA should be registered with the Financial Conduct Authority, which makes sure that IFAs act ethically and only in the client’s own interests.

Why you need an IFA

In May 2017, the inflation rate in the UK was at a four-year high of 2.9%. This means that if you leave your money in a current bank account or a low interest savings account, you may not be taking advantage of current rates.

You need to create a financial plan that will maximise your current income, prepare you for retirement, and make sure that your family are provided for when you die. To do this on your own can be complicated and time consuming, since few people have the necessary expertise to make sure that their financial plan is the best it can be. An IFA will help you define your financial objectives, then create a plan to achieve them.

Book a financial discussion with an independent financial advisor at Endeavour Financial Planning to discover how we can help you achieve your financial goals.

Tax and Estate Planning advice are not regulated by the Financial Conduct Authority.

Sources used:

Posted by Mark
2nd August 2017


All blogs and news on Endeavour Financial Planning are for information purposes only and are not intended to provide advice. Please seek the advice of a financial advisor before making any financial decisions.

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1 Comment »

  1. This is a great example of what the difference between an Independent Financial Adviser and a restricted Financial Adviser is. I hope this explanation reaches a vast audience as often people won’t fully understand that they are speaking to a restricted adviser and in turn, not be aware of the other beneficial products and services available to them on the market.

    Comment by Jessica Watts — 26th September 2019 @ 12:49 pm

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