There are 3 ways of seeking financial advice for products such as life assurance, personal pensions and collective investments like unit trusts and individual savings accounts (ISA’s); through either an independent financial adviser, multi-tied agent, or tied agent.

Independent Financial Advisers (IFAs)
Offer unbiased financial advice to their clients and recommend the most suitable products, if any, after researching the whole market. The key differentiator is that they act on your behalf and will offer you the option of paying by a fee, as well as the option of paying by commission.

The big advantage of independent financial advice is that you have access to all the products on the market through a qualified practitioner. As they act on your behalf, they provide personalised written reasons why they have recommended a particular course of action.

Tied Agents
Can advise only on the products of one provider.

Many people buy financial products through tied agents, such as sales staff who work at their bank or building society. When they want a pension or investment product, they often find it easier just to nip into their bank and accept what is sold through that organisation’s relationship with a single life insurer or investment house.

The person providing the product information or advice is acting on behalf of the product provider. Many people buy products this way, usually because they feel more comfortable buying from a big-name organisation and assuming, sometimes incorrectly, that they are bound to get a good deal. What they are actually getting is limited information from a small selection of products.

Multi-tied Agents
Are financial advisers allowed to recommend the products of a limited number of providers, rather than just one.

Banks and building societies that previously had a single tie to a financial product provider, are likely to include in their range one or two products from other providers. This will avoid the time and costs of having to look across the whole market for the ‘best’ products. Customers need to check out the breadth of products and providers on offer and decide if the choice available is a suitable enough range for them.

Burns-Anderson
Is an independent financial adviser. Independent financial advice is considered the gold standard of financial advice, since the adviser works on your behalf and offers access to and guidance on a huge range of products.