Financial adviser

The job of a Financial Adviser is to offer financial advice. The term is typically (but not exclusively) used in the UK.

Please note the spelling financial adviser (common in Britain) is adopted above financial advisor (common in the US) for the purposes of this article.

Most Financial Advisers receive their remuneration by commission payments on the contracts they arrange or through charging a fee for their services.

Advice or Sales

Before Financial Advisers there were insurance salesman. The transition from salesman to adviser is a subtle one and can be an exercise in semantics. Essentially a salesman sells where as an adviser advises. To try and make the point here is an example:

Mr Smith is single, rich and lives on his own. He is worried about dying. If Mr Smith sees a salesman he may be sold a life assurance contact. If he sees an adviser he may be told he does not need any life assurance as he has no liabilities and payment on death will compound his inheritance tax problem.

Multiple Titles

Financial Advisers have be known by many names! It is a seemingly endless task for marketing departments to come up with new titles to add a subtle spin:

e.g. personal consultants, account adviser, financial planner, personal financial planning consultant, individual finance manager etc...

Many titles are role specific. Other entries give more detail.

Independent

Under UK polaristion rules the concept of the Independent Financial Adviser or IFA was born.

To be independent of any insurer or other third party interest ensures the client receives unbiased advise.

The non-independent advisers are therefore company representatives, thus showing where their priorities lie.

Since 1st December 2004 the Financial Services Authority has introduced a new classification of multi-tied adviser who may represent more than one company.

External links

FSA website
AIFA Association of Independent Financial Advisers - UK Trade body