Many people are confused by the different types of financial advisor available to them. Often, someone is reluctant to pay for advice so they look for a financial advisor that can advise them ‘for free’ and instead earn their money by taking a commission from the company that their client eventually places their business with.
The analogy being used in the papers is that you wouldn’t go to a doctor who only prescribes drugs from one company and is paid by that company so why would you go to a financial advisor who effectively does the same?
The FSA is now stepping in and saying that it needs to ensure that people are 100 per cent sure of the advice they are getting and how its being paid for. No rule changes have been announced as yet but it looks imminent.
The implied forthcoming changes will have a great impact on the CeFA syllabus and how financial advisors could be paid. The result could be great for the income of financial advisors. IFAs (Independent Financial Advisors) who are not tied to one particular company can earn up to £200 or more per hour, cover all aspects of their client’s finances and offer advice on the whole market.
