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What is an independent financial adviser and what do they do?

Advisers can help you to understand your financial situation with truly independent advice so you can weigh up your options and choose what's right for you.

Not all financial advisers are called ‘financial advisers’. Sometimes, they’re named by their specialisms (‘mortgage adviser’, ‘investment adviser’, ‘pension adviser’ etc).

The FCA (Financial Conduct Authority) defines an independent financial adviser as:

“An adviser or firm that provides independent advice is able to consider and recommend all types of retail investment products that could meet your needs and objectives."

Independent advisers will also consider products from all firms across the market and have to give unbiased and unrestricted advice.

An independent adviser may also be called an ‘independent financial adviser’ or ‘IFA’.

What is financial advice?

Financial advice falls into two main categories – ‘independent’ and ‘restricted’.

An independent financial adviser, although likely to charge more up front, can recommend investment products from across the retail market. A restricted adviser will only recommend certain types of product from a single or a limited number of suppliers.

The key differences between independent and restricted advisers are explained in the following table:

Key differences Independent adviser Restricted adviser
Will consider all investments

Can focus on a particular market

Can consider products only from certain providers

Has to explain to you the type of advise they offer

Can use 'independent' to describe the type of advice they offer

Incentivised to recommend one product over another

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