Wider Choice Could Make Finding the Right Financial Plan More Complicated

Article excerpt

Byline: By MARLENE SHALTON

If you thought that finding the right financial adviser or planner for you was difficult, in two weeks' time the task may be even more complicated.Until recently there were two main ways of seeking financial advice for products such as life assurance, personal pensions and collective investments like unit trusts and Individual Savings Accounts, even just financial advice or a financial plan: either through an independent financial adviser or a tied agent.

Following a radical shake-up by the consumer watchdog the Financial Services Authority of the way financial products are sold, from June 1 the choice will be widened with the introduction of the multi-tied agent.

Multi-tied agents are financial advisers allowed to recommend the products of a limited selection of providers, rather than just one.

Tied agents can only advise on the products of one provider.

Independent financial advisers (IFAs) offer unbiased financial advice to their clients and recommend the most suitable products, if any, after researching the whole market. The key differentiator is that they act on your behalf and will offer you the option of paying by a fee, as well as the option of paying by commission.

The big advantage of independent financial advice is that you have access to all the products on the market through a qualified practitioner. An IFA's job is to research and recommend the most appropriate financial solutions after asking their clients a whole range of detailed questions about their circumstances, their financial goals and their attitudes to risk. IFAs are answerable to the FSA to ensure that they keep to the rules.

As they act on your behalf they provide personalised written reasons why they have recommended particular products or a course of action. …