If you go to your high street bank you may be greeted by a financial adviser, but they could well be ‘tied’ to recommending and promoting the products of the bank, or a single insurance/investment company to which the bank has an allegiance. So why do we need independent advisers, and how can customers be sure they are getting a fair deal?

Independent Financial Advisers

Independent advisers are able to select the correct product for customers from the entire market – this means they can potentially recommend any product from any insurance company providing it suits the customer’s needs and objectives. With such a wide choice of companies, investments and saving tools the customer can be reassured that they are not simply being provided with a standard recommendation – and are getting personalised advice.

To ensure you do get personal and correct advice your financial adviser will collect certain details about you and your circumstances. Remember to be as open and honest as you can, because the more information you provide, the more accurate the adviser can make their recommendations.

As an additional safeguard an independent financial adviser must offer you the option of paying by a fee alone so that you can be sure that there is no commission bias in the recommendations.

How do I know the company I am dealing with is independent?

All financial advisers must disclose their status during initial discussions and will provide potential customers with the appropriate 'disclosure documents':

If the advice concerns investments a 'Client Agreement' must be provided. This contains information on the services provided by the firm, how the firm is paid for the business it conducts, their complaints procedure, Data Protection and coverage under the Financial Services Compensation Scheme (FSCS). Alternatively firms may, as we do, issue a shorter version accompanied by the regular 'Key Facts' document (below).

‘Key Facts about our services and costs' tells customers about the firm’s activities, whether they offer advice from the whole market, or a range of companies, or even a single firm. It explains the service provided by the firm, the payment options and the way in which the firm is remunerated. It also includes information about the firm being authorised and regulated by the Financial Services Authority, and how to make a complaint should customers be dissatisfied.

You can ask to see these documents at any time. To request copies of ours use the 'contact us' page.

What protection do I have?

Your adviser will always endeavour to do the very best for you. Whenever you deal with a financial adviser you will receive details of the complaints procedures offered by the firm. If you wish you can request a copy of these procedures at any time.

The Financial Services Authority (FSA) is the government watchdog that regulates all financial and insurance firms – these range from the largest multi-national bank, to the financial adviser operating as a sole trader. The FSA handbook of rules and guidance lays down the laws to which all Independent Financial Advisers must adhere, and the way they treat customers is governed by the ‘Conduct of Business’ (COBS) rules. The rules are freely available from the FSA’s website– www.fsa.gov.uk. Please note: this is an external site and our firm is not responsible for the content.

When the adviser is advising you on regulated products (including investments, insurance and mortgages) you have the protection of the Financial Ombudsman Service (FOS) and the Financial Services Compensation Scheme (FSCS).

If you are unhappy about the advice or service you have received you should firstly contact the firm that provided the advice or service. This gives them the chance to put things right and/or to provide their own version of events. Should you remain dissatisfied you can refer your complaint to FOS who will investigate the complaint independently and make a ruling. FOS work with customers and financial advisers to resolve complaints, and when they do have to make a ruling it is binding upon the firm.

If you try to submit a complaint to a firm and the firm is dissolved or unable to meet its obligations, you may have recourse to the FSCS (Financial Services Compensation Scheme). This is a service funded by all the companies within the industry to protect customers where firms have closed or gone into liquidation.

Anything else I should know?

Some financial advisers also give advice on products that are not regulated by FSA – such as most buy-to-let mortgages and general taxation advice. Your adviser will explain to you when you are receiving advice on an unregulated product. It is important you are happy with the advice as you do not have the added protection of FOS or FSCS when dealing with some unregulated products.