IFAs, Financial Planners, Wealth Management...????

BoudiccaUK

If I want to get a full review of our financial situation who should I be looking to speak to?

Are IFAs, Financial Planners, Wealth Management Companies all the same thing? If not what are the differences?

I don't mind paying for the service but I'm a little confused and rather cautious of who I hand my money over to for advice. What do I need to look for and perhaps more importantly, who do I need to avoid?

I am looking for someone to look at our situation and the products we already have (private pension, life insurance, critical illness insurance, buy-to-lets, property) and then make suggestions of how we can move forwards towards retirement - obviously being tax effective and having the most money available possible for our old age.

dunstonh

Are IFAs, Financial Planners, Wealth Management Companies all the same thing? If not what are the differences?

There are two types of advice classification in the UK. Independent Advice and Restricted Advice.

Independent is the one to go for
Restricted should be avoided. However, it is a very wide range. That category covers the single tied sales agent of an insurer through to limited panel of providers to near whole of market with minor restrictions. The latter would be sufficient for many people as long as the restrictions are not too restrictive. The problem is that the average consumer won't know what is too restrictive. So, in that respect, going independent avoids any issues. However, on paper, a near whole of market restricted adviser would be similar to an IFA for most consumers.

Firms that are independent will go out of their way to make it clear that they are. The term "wealth management" tends to be used by restricted firms. However, it has no real meaning other than marketing.

Linton

Companies that call themselves Wealth Managers tend to focus on wealthy people - say several £100K of available assets or more. If your needs are more modest I suggest you talk to two or more local IFAs, ideally ones recommended by someone whose judgement you trust. They should be happy to give you a short, free discussion without any ongoing commitments from which it should be clear whether you and they feel they can help you, you are comfortable doing business with them, and what the costs are likely to be.

bigfreddiel

If restricted advisors are to be avoided, who would choose them over an independent advisor and why? Cheers fj

BoudiccaUK

bigfreddiel wrote: »

If restricted advisors are to be avoided, who would choose them over an independent advisor and why? Cheers fj

Good question - you beat me to it.

BLB53

A relevant article on Fire v London blog

https://firevlondon.com/2016/09/11/which-idiots-pay-2-fees/

dunstonh

The average consumer has no idea of the different types of adviser that exist. Even when people have seen a restricted adviser, many would not know the extent of the restriction and may not even realise they are restricted.

LHW99

So what is a Chartered Financial Planner? Do they overlap with (independent) Financial Advisers?

wjr4

LHW99 wrote: »

So what is a Chartered Financial Planner? Do they overlap with (independent) Financial Advisers?

A Chartered Financial Planner is an IFA (usually) who has obtained a higher qualification than required (the level 4 diploma) - this is what most IFAs should aim for IMO (or at least IFAs who plan to be in the industry for a while).

dunstonh

So what is a Chartered Financial Planner?

Chartered is a higher level of qualification. It can be held by restricted or independent.

Chartered is overkill for the majority of UK consumers. That is why it is not required. However, for those with complicated issues, it can add value. Although the exam structure for financial services is modular. So, you can hold multiple higher/further qualifications in an area which make you highly knowledgeable in that area and not become chartered. You could also be chartered and avoid certain areas of financial planning in any great depth.

For example, the pensions qualification for the standard requirement is, in my opinion, woefully inadequate. It covers basics but I don't personally feel is it on par with say the investment qualification. So, I would look for exams AF3 or J05 (there are other versions too) when looking at pension income options. A chartered financial planner may not have taken the pensions module to become chartered. So, my opinion is that the qualification in the area involved is more important than a collection of qualifications that may not include the area in question.

There is a lot of debate in the industry as to whether certain products or advice areas should have different levels of qualification. The debate isnt going anywhere but it does show there are differences of opinion as to what is best.

sandsy

LHW99 wrote: »

So what is a Chartered Financial Planner? Do they overlap with (independent) Financial Advisers?

There are different levels of qualifications for advisers.

The minimum required level is ranked at QCF Level 4 which is considered to be equivalent to 1st year degree level.

Chartered Financial Planner is QCF Level 6 which is equivalent to degree level.

You need to find an independent adviser that you feel comfortable with - comfortable sharing information with them, comfortable with the way they treat you and share their knowledge with you as an individual, comfortable that their philosophy to advice doesn't contradict what you're looking for, comfortable that they are suitably qualified for your needs, comfortable that the charges they quote seem appropriate given your needs and, if based on the size of your funds, not disproportionately excessive.

This might mean that you have to talk with a few before committing to one.