Why use Independent Financial Advice in the UK

Professional financial advice has become more important than ever before for consumers to help them navigate through financial muddle. Today, a lot of people feel unsecured about their investments as they lack trust and confidence in financial services. And the situation is about to get more complicated with the introduction of ‘de-polarisation’.

The current regime for financial advice is 'polarised'. This means there are two main types of adviser. Tied advisers can only recommend the products of one provider. Independent advisers can, in theory, recommend products from any provider.

However, the rules coming in during 2005 will introduce a new breed of financial adviser known as a multi-tied adviser. This dismantling of the current regime has been dubbed as 'de-polarisation'.

Multi-tied advisers will be able to offer products from different providers, but the decision about which providers these are won't be based on who has the best products. Instead, it will be made round the boardroom table between the directors of the big product providers and the directors of the adviser firms.

A multi-tied adviser won’t be choosing the best product for you from the whole market, but offering the best one from a limited range that someone else has selected. This range might include two providers or ten. It might include the best products available on the market or the worst, the cheapest or the most expensive.

But the financial services regulator has defended this new system by saying this will give enough choice to consumers.