Why the 'I' in IFA is all about the personal touch

The establishment of the Independent Financial Adviser in 1988 created a legal distinction between those financial planners who were tied to a particular product provider (or providers) and those who operated independently. 

For those who chose the latter route, there were strict regulations about how they conducted themselves, and the basis on which they provided advice to clients.  That regulation has become stricter in the intervening years, and IFAs are now regulated by the Financial Conduct Authority.  They must hold a minimum level of qualification, maintain a Statement of Professional Standing, and provide unbiased, unrestricted recommendations across the entire retail investment market.  Firms labelling their services as independent must ensure this accurately reflects the scope of the advice they provide.

Perhaps most importantly, before recommending any product, IFAs must conduct a comprehensive fact-find to understand the client’s financial circumstances, investment objectives, and attitude to risk.  They are then obliged to provide a clear Suitability Report outlining why a recommendation is appropriate.

As the regulations, which are there to protect the consumer have become more onerous, perhaps unsurprisingly some IFAs have decided to take the tied path.  That is one of the key reasons we have seen so many smaller independent financial planning firms being swallowed up by the bigger players.

At the same time, you can’t have failed to notice a growing number of advertisements for automated investment platforms, which provide a way of investing, but which only provide limited advice, or no advice at all.

In this environment, it is worth pointing out how important the independent sector of the market is, and why an adviser who really understands your individual needs, objectives and concerns can provide more personalised advice.

Every new client at Lovewell Blake Financial Planning receives an initial no-obligation meeting, at no charge, at which that all-important fact-find takes place.  And this is no superficial affair: the outcome will usually be a detailed, structured and comprehensive Suitability Report, outlining the client’s risk profile, current financial position, future objectives, family protection requirements, retirement goals and estate planning (IHT) issues.

The document will also outline a range of options, make recommendations based on the client’s circumstances, and set out the costs involved in a clear and transparent way.  Not only will those recommendations take in the entire market (without being skewed towards any one product, service or provider), but they will also make every effort to be the best ‘fit’ for the client, including such considerations as their ethical stance.

Importantly, Independent Financial Advisers can offer regular, tailored reviews, to ensure that those recommendations are still right for the client and that the client’s own objectives have not changed.

One of the aspects which clients tell us is most important is the personal nature of all that contact.  This is not about filling in forms online; most of these meetings are face-to-face (which can mean Teams or Zoom if that is what the client wants), in the client’s home or office if they are more comfortable with that.  They can also include the client’s wider family in the conversation.

In an era where corporate consolidation and faceless technology is increasingly the norm, such a personal, bespoke approach is ever-more appreciated.  The ‘Independent’ in ‘Independent Financial Adviser’ may have a definition, but for many people, it is the gateway to a personal touch which is sadly disappearing from so much of how we live our lives.