The changing face of financial advice!
As the rules on pensions, investments, mortgages and life cover have become ever more complex, it has been more and more difficult to keep up with regulation and to maintain up to the minute expertise in all areas.
For some time now, the more effective IFAs have tended to specialise and, as many of you will know, about a year ago I gave up my licences in pensions & investments, allowing me to concentrate on increasing our expertise in mortgages and protection.
In order to ensure that we can continue to offer our clients a full financial advisory service, we now work very closely with other independent financial advisers, who specialise in the fields of investments, pensions, annuities and long term care, and so we can refer clients on to these associates when the need arises. These qualified specialists, who are all highly skilled in their own areas of expertise, enable us to advise across the complete financial spectrum and thus provide a coordinated approach to financial planning.
When a new or existing client contacts us for advice, we will hold an initial discussion with them to determine which areas need advice and so determine which of our associates will be best suited to deal with the enquiry. If a full financial health check is required, then more than one adviser will be involved. For non-mortgage or protection business, the adviser concerned will be asked to contact the client separately and arrange an appointment to take the information required to advise in that area.
Matthews IFA Ltd will be kept informed of progress, and so we will be able to coordinate the advice process and ensure that, where more than one adviser is involved, there is no duplication of effort and the client is happy with the way things are progressing.
On 1st January, 2013, the face of financial advice is going to change completely as new regulations will come into force from the Financial Services Authority, under the heading of the Retail Distribution Review (RDR).
The main provisions of the RDR are as follows:-
1. The new regulations will only apply to advisers who advise on pensions or investments.
2. Those advisers will need to hold additional qualifications in order to advise in these areas.
3. In order to be able to use the term “independent financial adviser”, they must advise on all areas of financial advice and will not be able to limit their advice to certain specific areas (say mortgages and protection).
4. Clients will no longer have a choice about whether their adviser gets paid by means of a fee from them or a commission from the provider, as commission will now be banned on all products covered by the RDR. Clients will now be charged a fee on all pension and investment advice and will sign a fee agreement prior to any work being carried out by their specialist adviser. This does not apply to mortgages and protection, as we may continue to be paid commission by the providers.
Although we will no longer be able to call ourselves “independent financial advisers” under the new FSA definition, we will still be “whole of market” and will be totally independent of any insurer or mortgage lender. This means that, as now, we will do our research from the whole market place, in order to give you the lowest quotes for mortgages and life cover, etc.
From 1st January, 2013, the initials “IFA” in our company name will stand for “Independent Financial Associates”, so hopefully we will not have to suffer a name change and all the inconvenience and additional cost that this would incur. Should this change, however, we will inform all our clients by email.
You may be assured that these changes will have no affect on the way we do business or the quality of our service. The only difference you will notice is that, should you require advice on pensions, investments, annuities or long term care, you will have to pay a fee for this, as advisers will no longer be paid commission.