Emma Simon
AUTHOR Emma Simon| CREATED 14 Jan 2016
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Meet the modern adviser

Financial advisers come in all shapes and sizes. So what are the different adviser types and what are the factors that determine which is most suitable for your needs?

Some advisers specialise in specific products – pensions or mortgages, for example. Others can take a more comprehensive look at your finances and give you a complete money MOT.

In each case, it’s important to check what type of advice you’re getting. Is it independent, “restricted” – or simply guidance? There’s a big difference between the three.

Know your adviser

Independent financial advice: a tailor-made plan

  • Independent advice gives you the peace of mind that you’re seeing a qualified and regulated professional who will review your finances and recommend the most suitable products from across the market.
  • It’s a little like going to a bespoke tailor: you can have any fabric, any colour and any style. Although probably not purple tweed flares.
  • You don’t get this tailor-made approach from other types of adviser.
  • Most independent advisers work for an hourly fee, although some will charge a set rate for certain tasks – transferring a pension or setting up an ISA, for example.
  • Independent advisers do not receive commission for investment advice, but they may do so for insurance. Suits you, sir.

Restricted advice: a personal shopping service

  • As the name suggests, a “restricted” adviser will not have a full range of products to choose from.
  • Some will work with a panel of providers, others for just one company.
  • This is akin to a personal shopping service, where the assistant helps you find an outfit that fits – but only from the clothes in that particular store.
  • Restricted advisers selling pensions and investments are fully qualified.
  • It may seem like a poor relation to independent advice but it can suit a lot of people as it tends to offer packaged solutions, usually at a lower cost. Not everyone needs access to the entire market.

Guidance: cannot recommend products

  • Guidance is not the same as advice.
  • Someone providing guidance can explain in general terms what the options are, but can’t recommend individual products or suggest what’s the best course of action for you.
  • They don’t set up the products or investments for you. It’s up to you to act on the guidance, which may mean purchasing direct from the service provider on what is known as an ‘execution-only’, or ‘non-advised’ basis.
  • Government-funded services, such as the Money Advice Service or the Pensions Advisory Service, offer guidance on a range of financial issues.
  • You might be happy buying clothes off-the-peg, but are you confident in making the right decision when it comes to pensions and investments? And is that fluorescent yellow T-shirt with a pug on the front quite right for the Folkestone Angling Club’s annual dinner-dance?

So now you know the different types of advice and guidance that’s out there, why not delve a little further and find out how to prepare for your first adviser meeting.


Emma Simon

financial journalist freelance

Emma Simon is an award-winning consumer journalist with 18 years’ experience writing about money, property, travel and business. She is a former personal finance editor of the Sunday Telegraph, deputy money editor of the Daily Telegraph and personal finance correspondent at the Press Association. She writes for a number of national newspapers, including the Sunday Times, Guardian Online and Mail on Sunday. She has recently written a guide to retirement for the Rough Guide series, and has put together reports and publications for major companies and consumer organisations including Alliance Trust, Fidelity and the British Bankers’ Association.