Local independent financial advisers are a little different to the big banks and insurance companies we are used to. This article tells you more about how they work, what separates them from other financial advisers, and why you should consider using them for your own investments.
The good news is that there are now a number of independent financial advisers who can give you sound advice on investments, stocks, commercial loans and even the best mortgage deals in your area. And it’s becoming easier than ever before to find one since the introduction of crowd-sourcing initiatives like Yeeply.
Benefits of local independent financial advisers
- No conflict of interest
Many financial advisers are tied in with big banks, employers or insurance companies. They are sometimes given incentives – such as a company car – to push their own products, rather than the best products for you. More worryingly, there have been instances where bank staff have taken out loans from their employer at inflated rates and received kickbacks from insurance companies which leads both of these parties to be in a better position to help each other than they are to advise you.
- Free advice
A local independent financial adviser will give you more objective advice for free. This can make a significant difference to the success of your investments, especially if you’re a first time investor who’s not sure what to do next. A good independent adviser will go that extra mile to develop a relationship with you and gain an understanding of your investment needs, whether they be short-term or long-term.
- A proven track record
One of the big issues with advisers who work for insurance companies is that they usually have targets and pay incentives that are based on sales figures, which are often driven by products being sold where there is a high probability of commissions, rather than sound financial advice. This can make it difficult for any adviser working for a ‘big four’ insurance company to focus on providing sound investment advice – what’s the point?
On the other hand, an independent financial adviser will have a proven track record in their own line of work, and will not be tempted to sell you products which they personally get a kickback on. The best local independent financial advisers are the ones you can trust to provide unbiased advice.
- More than just advice
As well as giving good financial advice, many of these advisers also provide other services, such as real estate and business debt facilities. Some are also experts in tax planning, with a track record of successfully avoiding potentially timing issues with tax because they understand the implications of various schemes that can affect your bottom line.
Why you might want to consider using local independent financial advisers
- More than one adviser to choose from
You may be used to following the advice from your estate agent or mortgage broker, but this is not always the case when it comes to picking an adviser for your investments, loans or insurance. Locally based independent financial advisers offer more choice than the big banks and are more likely than their counterparts at other firms to give you impartial advice on products designed for investors who have similar goals and objectives as you do.
- Less likely to be conflicted
The bigger the company, the more money it makes from commissions and the more of these commissions it passes on to the person who makes the sale. While you are advised to shop around for your mortgage or car insurance, this is often not really possible when it comes to a complex investment or pension product. In many circumstances, there is one company that is best suited for your requirements – and that happens to be an insurance company or captive bank working alongside a large investment firm. Unfortunately, advisers who work for these companies can be incentivised by higher commissions for selling these products instead of doing what’s best for you.