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UK Independent Financial Advisors
Independent Financial Advisers (IFAs)
offer investment advice and products from all the companies in the
marketplace, not just a single firm. They offer unbiased advice, but
can be more expensive than other options. Still, they offer the
widest array of products, so they're unlimited in choosing what best
meets an investor's needs. They can also keep track of investments
and adjust for market changes, saving the investor much time and
An IFA's expertise isn't free. Traditionally, advisers have been
paid by commission with the cost deducted from the investor's
holdings. Advisers can also charge a fee, somewhere in the realm of
£80 to £200 an hour, taking into account considerations like
experience and specialties. There is also a combined method whereby
fees are charged by the hour, but are paid by commission. By law,
IFAs have to offer investors the choice to pay by commission, fees,
While commission should not influence an IFA's advice, there could
be a conflict of interest with respect to products that don't pay
commission, like National Savings & Investment products. Charging by
fee removes this doubt. Investors pay the hourly rate and any
commissions are returned. Experts say investors are usually better
off paying by fee, most especially when dealing with very large sums
All IFAs have a Certificate in Financial Planning or the equivalent.
This is the basic qualification that all advisers must complete.
Many choose to go further, specialising in areas like investment,
long-term care, or pensions. Advisers who achieve at least three of
these may attain the Advanced Financial Planning Certificate. They
can also study further to become a Chartered Financial Planner,
which puts them roughly at the same level as an accountant.
Advisers can be generalists or specialists. Specialists focus on
specific areas whereas generalists do everything and may only handle
certain types of cases a few times in a year. Choosing one or the
other depends on an investor's specific advising needs.
Finding an IFA
As with most things, the best way to find an IFA is to solicit
recommendations from friends and family. Investors should meet with
potential IFAs and clarify costs, their training, their
qualifications, and so on. IFAs will do a factfind – have you
complete forms and ask about your financial goals, aversion to risk,
and current investments. It's important to be comfortable with an
While IFAs are not cheap, the services they provide can be
well-worth the money you spend.