Types of Financial Advice
There’s a dizzying array of ‘advice’ services available in the UK. These range from the government’s free guidance services to giant online investment platforms, so it’s important to understand what you’re signing up for.
Financial advice covers such a broad spectrum that many advisers specialise in a specific area.
At Drewberry, our advice breaks down into four main areas.
Whether you’re saving hard for retirement, trying to withdraw your pension assets, managing a mature pension portfolio or still waiting to get started, our pension advice aims to ensure that you can retire in the style you deserve.
Our modern, fee-based financial planning service sets out to make your money work as hard as you do.
Because we take the time to understand every aspect of your finances, our advice is always tailor-made to your unique circumstances.
Whatever your financial ambitions, we can help frame the best investment strategy for your needs. We’ll help you access a huge variety of funds and by monitoring the performance, charges and tax efficiency of all your investments we’ll help ensure they deliver the returns you need.
Don’t let unnecessary tax take a bite from your assets. We’re experts in all forms of tax-efficient investment – whether it’s making the most of your household’s ISA allowance, reducing the tax on your savings or helping to plan the most efficient way to pass on your assets with inheritance tax planing.
Restricted or Independent Financial Advice?
The Common Threads
Both types of adviser are obliged to charge fees for the advice they provide on investment products. However, those advisers who offer mortgage and insurance advice generally don’t charge fees as these products have remained commission based.
All financial advisers, regardless of their regulatory status, are required to achieve the same qualifications and to meet the same requirements to ensure they provide suitable advice to their clients. All genuine financial advisers are approved and authorised by the Financial Conduct Authority (FCA).
When seeking financial advice it’s crucial to establish with what sort of adviser you’re dealing. A decent adviser will always discuss their status, and the likely fees they’ll be charging at your first meeting. They’re also required to inform you of all this in writing before you need to spend any money.
An independent financial adviser (IFA) is an adviser who isn’t tied to the products of a particular provider or group of providers and who, in theory at least, is free to recommend on the best products from right across the market.
Restricted advisers are tied to the products of a panel of key providers. At Drewberry, we’re slightly different from the crowd in that our business enjoys dual, ‘restricted+’ status. This means that we recommend products from our panel of leading investment providers but that, if the need arises, we can select products from elsewhere in the market if they’re better suited to our clients’ needs.
The Benefits of Financial Advice
One of the benefits of paying a fee for the advice you receive is that someone else is responsible for the product and investment selections you make. This liability can provide useful protection for investors who find that they’re saddled with unsuitable product and investment choices.
Protecting you and your assets
If you receive poor advice you can contact the Financial Ombudsman Service to complain. You may also be entitled to recourse from the Financial Services Compensation Scheme (FSCS). This covers most types of investment business up to a limit of £50,000 while insurance advice and arrangements are covered for 100% of the claim, with no upper limit.
By contrast, if you buy an unsuitable product directly there may be little or no recourse open to you in terms of compensation.
The Difference Between Financial Advice and Guidance
Financial Guidance Is Not Advice
Financial guidance can help to explain the various options that might be open to you. It can also help with things like calculating the level of pension income you’re likely to need. However, guidance won’t provide an analysis of your individual circumstances or result in financial recommendations for you to follow. You’ll still need a financial adviser for this.
Information only service
With financial guidance, also referred to as ‘information only’ or ‘non-advice’ services, you still need to decide which product to buy without having any recommended to you. This means that no one is liable but you in the event of a poor decision.
There are numerous businesses across the UK that offer financial guidance for a fee or which provide ‘transactional’ services to their clients, so be sure you know what you’re signing up for.
The government funds a number of free financial guidance services, such as Pension Wise and the Money Advisory Service, which are well worth checking out before you come to address your finances.
Financial Advice at Drewberry™
We take a holistic approach which means that we look at your finances in the round. We’ll examine your financial strengths, and your weaknesses, and help you to identify what’s most important in life. We’ll show you how to protect those things that you value most and how to build the most tax-efficient nest egg from your savings.
We know that – whatever you might read – there are no shortcuts to building wealth. Creating financial security takes time, discipline and no small amount of sacrifice. It also means getting the simple things right, year in and year out.
This is the essence of our approach at Drewberry and it’s why we think our fees pay for themselves over time.
Our Focus Is On You
At Drewberry Wealth, our individually-tailored financial advice is aimed at making your money work as hard as you do
A Long Term Relationship with a Dedicated Adviser
We set out to build long-term relationships with all our clients. You’ll always talk to the same dedicated Drewberry adviser (who’s only ever a call away)
Taking Care Of Your Wealth
We’ll put your finances on an even keel and, through careful management, we’ll keep them there for decades to come
And What About ‘Robo Advice’?
Interestingly, when the Financial Conduct Authority (FCA) published its Financial Advice Market Review (FAMR) back in March 2016, its report concluded that up to 16 million Britons could be trapped in what it termed the “financial advice gap”. This means that roughly 30% of adults in the UK need financial advice but that they can’t afford it. As a result, the FCA believes that the future might lie in “online automated advice models that have the ability to deliver advice in a more cost-efficient way.”
The Rise of the Robots
This has prompted increased interest in what’s termed ‘robo-advice’ an automated online approach to wealth management that relies on algorithms to provide portfolio advice. The idea has already attracted attention in the US and, thanks to the FCA’s recent endorsement, some of the UK’s largest advisers have already expressed an interest in developing their robo-advice offering. If it does catch on in the UK, this approach might offer a cheaper option for UK consumers but it can’t deliver the same value as personalised financial advice.
Robo Advice: Limited By Design
Inevitably, such systems are based on decision trees of one kind or another, so they’ll only ever provide ‘guided’ invested sales. Similarly, no one is talking about ‘robo-advisers’ that can deal with your insurance, health or tax planning needs.
True financial advice takes your individual objectives and goals into account and adapts to suit the changing circumstances of your life.