FAQs
What is Independent Financial Advice?
The 1986 Financial Services Act introduced the concept of "polarisation" which meant that somebody who advised on your financial affairs must have been either a representative of a particular company (a Company Representative), so-called "tied-advice" or an Independent Financial Adviser (IFA). On the 14th January 2005, new rules were introduced by the Financial Services Authority which meant that those who advised on your financial affairs could chose to move away from either of these positions to represent a number of companies, the so-called "multi-tied" environment. The prospect of advisers recommending products or services from a fixed number of providers, rather than from one company's products, will provide clients with a wider service than tied advice, but this approach is regarded as a halfway house by PSFM. PSFM's view is that it's clients will only receive the best possible service by PSFM remaining fully independent and providing full market research. This should ensure that our clients receive the best products to meet their needs from the best product providers.
How "Independent" are Independent Financial Advisers?
Independent Financial Advisers are required by the Financial Services Authority to provide the most suitable advice for their clients. Independent Financial Advisers are, therefore, required to look after their clients' interests and should not be influenced by factors such as commission. Failure to observe the Financial Services Authority’s principles may lead to costly sanctions being applied.
How much does Independent Financial Advice cost?
Most Independent Financial Advisers will not charge directly for a first meeting. After this the Financial Adviser will either charge a fee for his or her work or receive commission, from a company supplying the recommended product or service, which will be used to meet costs. The amount of fees and commissions will normally be commensurate with the type of work and advice required and the complexity of the case. Fees will be agreed in advance and the current fee scale is available upon request. In all cases our clients will have the option of remunerating us for our services by paying a fee.
What do Independent Financial Advisers (IFAs) actually advise on?
Generally IFAs will give advice on various forms of investments, including regular saving schemes and lump sum investments, pensions for individuals and companies, life and health insurance and mortgages. Some IFAs offer additional services such as Tax Planning, Will writing, and more in depth Financial Planning, whilst others may specialise in mortgages, pensions or investment. In choosing an IFA it is worth finding out if they specialise in any particular areas.
How qualified are Independent Financial Advisers?
There has been a major revolution in raising the standard of financial advice over the past few years and all Financial Advisers are now required to demonstrate a foundation-level understanding of legislation, regulation, products and the markets by obtaining an industry-standard qualification, such as the Chartered Insurance Institute's Certificate in Financial Planning, it's predecessor, the Financial Planning Certificate, or a qualification of equal standing.
Who regulates Independent Financial Advisers and what happens if my IFA ceases to trade?
From 1st December 2001, the Financial Services Authority replaced a number of previous regulators to become the single regulator of the financial services industry.
The Financial Services Authority works to:
The Financial Services Authority carries out it's work by regulating the financial services industry and providing consumer help and information.
PSFM Limited is authorised and regulated by the Financial Services Authority. Our FSA Register number is 137684. You can check this on the FSA's Register by visiting the FSA's website
www.fsa.gov.uk/register/
or by contacting the FSA on 0845 606 1234.
PSFM does not hold client money. We will not handle cash and, with the exception of fee payment, all cheques must be made payable to the provider of any product or service that is recommended to you.
If you make a valid claim against PSFM Limited in respect of the plans we arrange for you and we are unable to meet our liabilities in full, you may be entitled to redress from the Financial Services Compensation Scheme. The Scheme can compensate consumers if an authorised company is not able to pay the claims against it. The Scheme covers investments, deposits and insurance. The Financial Services Compensation Scheme is a separate organisation from the Financial Services Authority. The Scheme will generally not cover 100% of your loss. Further details about the Scheme can be found at www.fscs.org.uk.
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