When Is A Financial Adviser Not A Financial Adviser?

The other night at my networking event I was chatting to a couple of new people I had not met before. They told me that they were financial advisers. Now, as you can imagine, being a property event host,  I get to meet a LOT of financial advisers. Usually though, they come in the form of IFA’s- or independent financial advisers.

So What Is A Plain Financial Adviser?

Hmmm, so obviously this being something a little out of the ordinary I asked a few questions to dig a little deeper. But first, let me ask you a question:

If you were looking for a financial adviser what would be your top priority for their skill set?

The reason I ask this is because I tend to find that financial advisers like to stick to advising about a few chosen areas. Financial advice covers a huge range of subjects. For example, you have mortgages, pensions, tax, investments and so on. My number one remit for an adviser is that they are independent. In other words, they are not ‘tied’ to any one product or company which would bias the advice they give to you.

The question then becomes; what is the point of an FA when you can have an IFA? Through further discussion the FA’s told me they were ‘ muli-tied financial advisers.” OK then, so what does that mean? Well, basically it means that they are really just introducers for various firms that pay them commission to do so. What it also means is they are really about sales and profit – not advice.

Blatant Misuse

You may think I’m being unkind or unjust here, but actually these same folks walked in with advertising literature  for a well known high end off plan company-who I can’t mention because they have a habit of threatening to sue people. The company have a bad name at for taking large deposits for off plan investments which never get built, and, because of their litigious nature folks find it hard to chase them for lost deposits. Nice. Some would say, if you ain’t got nothing to hide why do you need lawyers to protect you?

My opinion is that they were going to attempt to sell this to our members via the networking. When I questioned them deeper there was a certain amount of back-peddling as to who and what they represent. ( An agent for them, tried to recruit me twice to sell property on their behalf, offering a very high commission rate, which I declined, because we never sell other peoples off plan deals. Hence, they are very lucrative for those who look at the money rather than the ethics of how a company does business.)

A non independent adviser is likely to point you in the direction of the product which makes them the most money, not necessarily the product which is best for you.To me, this is a blatant misuse of the title ‘adviser’.

If you are in the market for financial advice (- which everyone should be! ) then I can recommend you several fantastic independent financial advisers ones who really know their stuff. Stick to the independents who can choose products from the whole of the market. Don’t bother with the tied ones, they are glorified sales people, that’s all. IFA’s will often have areas of expertise too, so it’s wise to get one that is good at the specific field you need advice on and perhaps a different one for your mortgage or other finance issues.

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