Why being an independent financial adviser is so important
Deciding how to choose a financial adviser can be tough. One of the main reasons clients choose us is our independence. But why is that so important?
Here we set out exactly what being independent means and what you can expect when working with a ‘restricted’ financial adviser. We also take the opportunity to discuss a few of the other benefits of working with us!
Independent versus restricted financial advisers
Independent financial advisers are completely free to recommend any investment products from the full range available on the market. This means achieving your financial goals is always the sole priority of these advisers.
On the other hand, restricted advisers can only provide advice about the products offered by some companies. This means that they aren’t necessarily able to put your needs first.
The downsides of restricted financial advice
Receiving advice from someone who is restricted has numerous downsides which are important to be aware of:
Limited options - when trying to achieve your financial goals, it’s best to have as wide a range of options as possible to maximise your chances of finding the right products for your unique circumstances. Restricted advisers, by their very nature, can’t provide this comprehensive approach, meaning your options will always be limited.
In addition, non-independent advisers may only be able to offer advice in certain areas of finance. This is because they may not have the same level of knowledge and expertise across different financial products and services as independent advisers.
Potential conflicts of interest - non-independent advisers may have conflicts of interest because they may receive commissions or other incentives for recommending certain products or services. This means that they may not always have your best interests at heart.
Stuck with poorly performing products - having a limited number of options available can result in you having to stick with products that are performing poorly, which ultimately limits the return you can make on your investments.
Poor value for money - restricted advisers are more expensive than the market average because they may need to cover the costs of their affiliation with a particular financial institution or product provider. For example, the initial charge for buying an investment bond with St James’s Place is 4.5%, which is significantly higher than what we, and many others, charge.
Trapped by high exit charges - many restricted advisers will tie you in by charging you if you wish to leave. This costly exit barrier can result in you not only feeling trapped with a particular product, but also feeling trapped from a financial wellbeing point of view, which should never be the case.
The upsides of independent advice
Now that we’ve dealt with the negatives, let’s take a look at the many benefits of working with an independent financial adviser. Being independent means we’re in control of the way we run our business, which means there’s more to independence than being able to offer a wide range of products.
With Bow Financial Services, you can expect the following.
Transparency – we believe people should know what they are buying, and we put this into action by clearly stating all of our fees on our website. We follow this up by providing a fee sheet at initial consultations.
The results speak for themselves on this. Statistics from VouchedFor – a website that helps you find and compare local financial advisers – show that 94% of our clients say they understand our fees – which is 7% above the industry average.
Exemplary customer service - we understand that finances can be a source of worry, which is why we pride ourselves on always being there for our clients. We’re always there for them.
However, you don’t have to take our word for it! Every year we’ve been in business we’ve been voted ‘Top Rated’ by VouchedFor, which we’re extremely proud of.
Clients review us on factors such as quality of advice, quality of service, and value for money. With a rating of 4.9 out of 5 after 90 reviews, we believe this client-centred approach is key to our success.
Here’s what one happy client had to say…
“Chris reviewed my financial situation and put forward a plan for my retirement allowing me to have a monthly income whilst maintaining capital (subject to the market). He also carried out inheritance planning and is always available should I have any questions regarding financial matters in between our regular meetings.”
Flexibility - as we’re able to advise on the full range of available options, we can adapt your financial plan according to your ever-evolving circumstances.
Sometimes it can be hard to know what’s relevant to bring up at our regular meetings. But don’t worry, we know the right questions to ask to establish what’s best for you, and we’re ranked 11% above the industry average on discussing personal challenges.
Clear – we’re always conscious of that fact that finance can be dry, complex and boring. We make sure we always put ourselves in our client’s shoes and make things as clear and unintimidating as possible. From our very first interaction we make sure everything is explained fully. We also keep you up to date with proactive support and regular communication, giving you peace of mind that your financial affairs are in safe hands.
We hope this has provided some comfort around the benefits of working with an independent adviser.
We love chatting about how we can people, so if you’d to give us a call, simply get in touch and we will get back to you as soon as possible.