• Schofield

The Value Between Independent and Restricted Financial Advice




When it comes to seeking out financial advice, there are two types of advice available:

‘independent’ and ‘restricted’. It should also be noted that you can obtain just ‘guidance’

which is not strictly financial advice.


When finding a financial advisor to work with, you should discover whether their advice is

independent or restricted; as this will determine the type of advice you receive. Knowing

the difference between the two can help you select the right advisor for your needs.


What is Independent Financial Advice?


An Independent Financial Advisor will research the whole market to find the right product

for you, offering impartial and objective advice. As a result, their recommendations are not

biased.


Independent advice is based entirely on your situation and you can rest assured that the choice of products picked is in line with your needs.


Independent advisors must also prove their status to the Financial Conduct Authority to be registered.


What is Restricted Financial Advice?


A Restricted Financial Advisor will only research a restricted number of products on the

market. Your options will be limited as restricted financial advisors cannot research

the whole market to find you the best product.


Often, restricted advisors work for large service companies with their own products to sell. So, you can never be entirely sure if a recommended product is genuinely the best one for you.


In addition, restricted advisors must declare to you that they are providing restricted

advice before they make a recommendation to you. They must also make it clear if picked

products are not suitable for you and recommend that you seek further advice if needed.


Fully regulated

All reputable financial advisors must be regulated by the Financial Conduct Authority. This

means they must follow certain regulations and rules to protect the interests of the

consumer. These include being fully qualified, demonstrating up-to-date product knowledge in the current market, and allowing for complaints to be processed through a third party if needed.


The Financial Conduct Authority checklist

Independent Advice

Restricted Advice

​Research all products on the market

Yes

No

Focus on only one particular market

No

Yes

Considers products from only certain providers

No

Yes

Can describe their advice as 'independent'

Yes

No

Can be incentivised when recommending products

No

Yes

Must explain the type of advice they provide

Yes

Yes

Types of investment advisors, 1


Independent Financial Advice with Schofield


Our experts always provide independent financial advice. We believe independent means we can deliver the best quality service and outcomes for our clients. Our team is highly qualified with years of financial planning experience, and we are proud to be independent.


For more information about our independent advice; or, if you’re looking to discuss your

financial plan or investments, get in touch with one of our financial advisors for tailored

and regulated independent advice based in Harrogate.


This article is for information purposes only. It does not constitute any financial or investment

advice.


Sources

1 - https://www.fca.org.uk/consumers/types-investment-adviser

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