There are two types of financial adviser, “independent” or “restricted”. A restricted adviser can only recommend certain products or product providers. This means they might only offer products from one company, or just one type of product. Essentially, an IFA recommends what is most suitable and best value from the entire retail investment market.
Regardless of their status, advisers can no longer be paid commission by providers so you will be charged a fee for advice and ongoing services. The cost of these services can vary significantly and therefore approach with caution. Integral to establishing if these fees represent value for money will necessitate a clear understanding of the service and expertise on offer.
For example, does your IFA offer in house discretionary investment management services – this is a specialist service made available by investment professionals for investors wanting to maximise the value from their investments and pensions. Why pay 1% p.a. to an IFA who simply subcontracts the investment management to a third party Discretionary Investment Manager when you can access Discretionary Investment Management with ourselves as a standalone service from 0.25% p.a.
Take the time to enquire and question historical investment performance relative to your risk parameters. Remember the predominant factors which enable you to measure and assess value are investment performance, cost of service and of course satisfying yourself that the service provided is executed by investment professionals.
Past performance is not a guide to future performance. The value of investments and any income from them can fall as well as rise. Capital values are at risk and not guaranteed.