What's the difference between independent and restricted advice?

Independent and restricted financial advice – two terms used to describe the types of advice financial advisers can give.

It’s likely you’re not too sure what the two terms mean, especially if you’ve never received financial advice before. But that’s why we’re here to help clear a few things up. It’s important to understand how each type of advice works and which one might be best for your financial advice needs.

In this article we take a look at the key differences of independent and restricted financial advice, including what we choose to offer here at Skipton.

The lowdown…

Independent financial advice

An independent financial adviser must research every relevant product on the market which could meet the needs and objectives of the customer. This includes researching any underlying products from across the market.

This allows the adviser to have access to a wide variety of products that could suit their circumstances.

Restricted financial advice

A restricted financial adviser will make recommendations from a narrow, more focused number of products and providers.

The restrictions can vary widely. Some advisers are limited to one or a small number of products and providers. Others will offer a range of products from a variety of different providers.

For example, a restricted adviser may choose to focus on only one product area – let’s say, pensions.

With this approach, they may be able to recommend any product and provider within the pension market. Or they might only recommend the products and services of one provider, or a small panel of providers.

A restricted financial adviser must make clear to you what their advice is restricted to. Also, if the products they offer aren’t suitable for you, they must make this clear and recommend you seek advice from elsewhere.

Each approach has its pros and cons

The advantage of an independent adviser is that the most suitable products available on the market at the time are being recommended to you.

However, researching the whole market is a time consuming and costly process for an adviser – which could be reflected in how much they choose to charge you.

A restricted adviser doesn’t quite have the same scope when it comes to researching the market. But this does mean that it gives the adviser an opportunity to focus only on the products they recommend.

The foundations of good financial advice

Regardless of which type of advice you choose, all financial advisers must have the same minimum level of qualifications and meet the same requirements. And whether an adviser offers restricted or independent advice, they are highly regulated and must follow the conduct rules under which they operate.

Ultimately, a good financial adviser isn’t here to sell you any old product. They’re here to help you achieve your long-term objectives in a way that’s best suited to your circumstances.

Here at Skipton…

We offer restricted financial advice

Across the last 30 years we’ve been providing a financial advice service to help our customers with their long-term financial goals. Throughout this period we’ve chosen to focus on the areas our customers need our help the most – investment, retirement and inheritance tax planning if they are suitable for your needs.

By choosing to focus only on a select area of products, we know the products we advise on very well and can be confident in recommending them to you if they’re suitable.

It’s a big team effort here at Skipton. We have an in-house Technical Research team who work hard behind the scenes to research the market on a regular basis – this way we believe we can offer a strong range of investment funds and products that suit the majority of our customers.

Put simply – if you want straightforward and tailored advice that’s formed through detailed research, we could help you.

As an added bonus, our advice is backed by our No Pressure Promise. We’re proud to say we won’t pressure anyone into taking our products. You’ll have the time you need to think over our recommendations, with no obligation to act. There’s no upfront fee to hear our advice either.

* In 2013, the Financial Services Authority was replaced with the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). Financial advice is now regulated by the FCA.