Advantages of Getting Independent Financial Advice from a Local IFA

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Retirement planning, investments, savings and mortgages are some of the more commonly sought after areas when it comes to obtaining independent financial advice.

The latest statistics from unbiased.co.uk, the professional advice website, show that the last year has seen 500,000 consumers enquiries for the ‘gold standard’ of advice – independent financial advice.

While the majority of consumers are enquiring for advice on retirement planning (46%), investments & savings and mortgages are also consistently on the list of most sought after areas of independent financial advice.

Ahead of Financial Planning Week, beginning next Monday (22 November), unbiased.co.uk has put together a top five checklist for consumers, helping them to make sense of what financial advice options are available to them.

1. To IFA or not to IFA?

If you are looking for financial advice, you have three options to choose from: an independent financial adviser, a multi tied adviser or a tied adviser.

An independent financial adviser (IFA) is the only type of adviser that can select from all the products available in the marketplace, offering truly unbiased financial advice. Tied advisers can only advise on the products of one provider. Multi-tied advisers are financial advisers able to recommend the products of a limited selection of providers.

2. How to find an IFA

Unbiased.co.uk currently lists 15,000 IFAs on its free and confidential online ‘find an IFA’ search. You can select an IFA based on a number of criteria, ensuring that you are matched with the best adviser to suit your needs. Factors you should consider when selecting an IFA include location; the sector of the market they specialise in; whether you prefer a male or female IFA, or whether you would like your IFA to focus on certain areas such as ethical investments.

You can now also access unbiased.co.uk’s ‘find an IFA’ search via your iPhone. The application is free to download, and you can simply type in your chosen postcode to find an IFA close to where you live or work. If you want to download the iPhone application, you can find it under both the ‘Finance’ and ‘Lifestyle’ categories of the Apple Application Store online.

3. What to ask when seeking independent financial advice
It’s a good idea to contact at least three financial advisers before selecting one and to find out as much information as you can.

Questions to ask include:
i.    Ask what qualifications they hold
ii.    Make sure the adviser knows your attitude to risk and takes a record of your financial background and what you want from life
iii.    Make sure the adviser explains to you how much the advice will cost you
iv.    Why any product or company they may recommend is suitable for you
v.    Whether the IFA is to remain independent after 2012 following the Retail Distribution Review

4. Qualifications
You should have a look at your chosen adviser’s qualifications to ensure you are aware of their credentials in the area of advice you are looking for. IFAs are qualified to provide ‘generic’ financial advice but they may also hold additional qualifications specific to a particular product area such as pensions, investments and mortgages.

To help you make sense of IFA qualifications, unbiased.co.uk has formally assessed and categorised them into two groups, Level A and Level B:

Level A qualifications are broadly equivalent to A level standard. Level A is currently the minimum level of qualification required to become a Financial Adviser, such as the CII’s FPC and Cert FP, the IFS CeFA or the CIOBS CIP qualification.

Level B qualifications are set at a standard equivalent to elements of a degree. Financial Advisers with Level B qualifications demonstrate that they have studied to a higher level in specific areas of financial advice and products.

5. How to pay for this service
An independent adviser will offer you the choice of paying by fee or by commission. A fee will either be charged at an hourly rate or as a total amount for the whole job but this must be agreed from the start. Paying indirectly through commission means an amount will be deducted by the product provider from any financial products you may take out and paid to the IFA. Tied and multi-tied advisers do not have to offer a fee option.

Karen Barrett, Chief Executive at unbiased.co.uk, comments: “Given the current economic climate, independent financial advice has never been more important to consumers. It is regarded as the ‘gold standard’ of advice because it offers access to, and guidance on, a huge pool of products from across the whole market.

“Mortgages, pensions and savings for children are just a few of the pressures and considerations facing consumers right now and therefore imperative for them to get as much information and help as possible to get on track. Financial Planning Week is the perfect hook to start and finding an independent financial adviser has never been easier - visit unbiased.co.uk to carry out a free and confidential search to find an IFA or alternatively iPhone users can now find a local IFA at the touch of a button.”

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