Below are just a handful of the thoughts of a selection of financial commentators and experts on the subject of independence, fees, the quality of advice and service delivered by most 'advisers', etc.
We could easily find literally hundreds more comments like these from people with no agenda other than having consumers' best interests at heart, but after reading the comments listed below, we think you'll be in little doubt about the type of planner or firm you should look to deal with:
- 'Most people pay for financial advice by commission. We don't think they should. We think they should pay fair, upfront, transparent fees instead.
A lot of IFA's find our focus on fees very irritating. It's not how people pay for advice that counts, they say, it is how good the advice is when they get it.
The problem with this is that how you pay for advice tends to have an impact on how good it is when it comes.'
MoneyWeek website - 'Independent advisers and planners are paid by their clients and work for them. 'Tied' advisers, working for banks or other firms, are effectively paid by their firm to sell investments.
The issue boils down to one simple question - is the adviser working for me the client, or for someone else?'
The Financial Mail on Sunday, 01 March 2009 - 'According to research published last week, eight in ten adults don't understand the difference between the various types of Financial Adviser.
It also reported that 70% of the 6.6 million people who received financial advice over the past 12 months believe they spoke to an 'Independent Financial Adviser' (IFA) - a highly unlikely prospect, given that true IFAs account for only a tiny proportion of all advisers.'
MoneyWeek, 09 June 2006 - 'How do I find a good Independent Financial Adviser (IFA)?' It's a question I get asked a few times a month during most of the year, but every 10 minutes or so in the run-up to the end of the tax year.
It isn't an easy one to answer. Why? Simple, because the vast majority of IFA's are still paid not in upfront fees (like lawyers), but in commissions and to me that just doesn't make any sense.
This is not to say that there are no good IFA's out there. Of course there are. Thousands make it clear that they are proper professional business people, offering a real service, by charging a set fee and rebating all commissions to their clients.
So the first part of the answer to the question of finding a good IFA is to make sure you get one that charges fees and you'll already have gone some way towards getting good financial advice.'
The Sunday Times, 08 April 2007 - 'Advice on the High Street is very different. Tied advisers are basically sales staff for banks with stiff targets to meet.'
thisismoney.co.uk - 'Commission-based advice can be dressed up to appear free, but can often prove more expensive than paying a fee. Such advisers might tell you they provide free advice, but they don't.
If an adviser is evasive about fees, beware.'
Which? Website - 'Need some unbiased financial advice? You'll be lucky to get it in the UK. Despite the best efforts of a small part of the financial advice community, the majority of our so-called advisers are in fact no more than salesmen. They exist purely to make you buy financial products whether you need them or not and they are paid hefty commissions based purely on how well they do this.
The good news is that consumers can also go to an Independent Financial Adviser if they want advice. The bad news is that most are paid on commission in just the same way as tied and multi-tied advisers.
This means that they too - despite their regular fury at the very suggestion - can't really be seen as much more than sales people either.'
MoneyWeek, 08 May 2008 - 'Beware of 'Tied' advisers and so-called 'wealth managers' like St James's Place, which use sophisticated marketing to disguise the fact that their advice is not independent. You are not paying these people to advise you: the company they work for is paying them to sell you something.
Go for genuinely independent, qualified financial advisers or planners and expect to pay a fee.'
The Financial Mail on Sunday, 01 March 2009 - 'Avoid advisers who you don't trust.
Your interests need to be aligned with your adviser's. If they earn more by selling you products and there is commission bias between products, then you are not both on the same side.
The financial planning process is about making long-term strategic decisions, so you need a trusted financial planner - not a product salesman.
Don't use a planner who can't explain easily things easily to you. You cannot simply delegate your financial planning, you must understand what your planner is doing on your behalf. If they use jargon that you do not understand or make it all sound complicated then find someone who can explain well to you, so that you are part of the process. This is one of your best protections against poor advice.
Don't use a firm just because they are local. Most people only need one detailed face to face meeting a year, after the initial relationship is established. If it means taking a day off and travelling once a year to be with the right planner, then invest the time in doing this.
Don't use one who can't clearly explain to you in advance how their charging structure works and how this will relate to you.'
Citywire, 08 November 2008 - 'All readers who want to be sure they are getting good, impartial advice should use a fee-only adviser.'
MoneyWeek, 08 June 2007
Please feel free to contact us if you feel you would benefit from working with Chamberlyns.