Independent or restricted advice: which one’s for me?

If you’ve ever looked for help with investment, pension or inheritance tax planning, chances are you’ve come across two types of advice. Namely independent and restricted financial advice.

It’s also likely that even when seeing these terms around, you may not know what they mean, and which one would suit you best. But don’t worry, I’m here to help clear things up.

In this article I’ll breakdown what each term means, which one might work for you and what we choose to offer here at Skipton Building Society. That way, you have all the information you need to make your decision.

Let’s kick-off with independent advice

As the name suggests, independent financial advice is impartial and objective. When looking for potential solutions for your financial goals, an independent financial adviser must research every relevant product area on the market for you.

Ultimately this approach allows a financial adviser access to a variety of products that could be suitable for you. Just think of it as casting a wide net, bringing in lots of different options.

Restricted financial advice is up next

A restricted financial adviser will make recommendations from a more focused number of products and providers, or may choose to focus on one area of advice, for example pensions. This can be from one provider or different providers.

A restricted financial adviser must make it clear that their advice is restricted. So, if the products they can offer aren’t suitable for you, they will recommend you seek advice elsewhere.

This means you’ll have all the information you need to determine if restricted advice is for you.

Which one is right for me?

With so much information out there, popular myths can creep in. Like independent advice being more freeing and offering better financial advice to customers, but it will all depend on the customer circumstances and needs.

So, taking a step back and looking at the big picture can sometimes help. I’ve laid out what each type of advice means, but as you can imagine, each approach still has its pros and cons.

For example, with an independent adviser you’re getting recommendations on the most suitable products available at that time.

But researching the whole market takes a lot of work. So it's important an independent adviser has the right team and tools in place.

On the other hand, a restricted adviser may not have the same scope when it comes to researching the market. But the advantage of this approach means they have more time to focus on the specific products that they recommend.

We offer restricted financial advice

Over the last 30 years, we’ve chosen to focus on areas that matter most to our customers – investment, retirement and inheritance tax planning. And a big reason for choosing restricted advice was that we only want to recommend products that we know well and are suitable for our customers. We asked our customers what they thought, and they told us they’d prefer us to be experts on areas relevant to them. So that’s what we do.

I head up a team of advisers and I know how knowledgeable they are and how well they meet our customer’s needs. This is why I know researching markets is an important part of this process. We have our own in-house Technical Research team, so we can offer a range of investment funds and products that suit the majority of our customers.

We also work closely with organisations like Abrdn to ensure we can offer financial solutions that you can trust.

Often, restricted advice can get a bad rap, and even the term ‘restricted’ can put some people off using this type of advice. But if you’re looking for straightforward, personalised advice that’s backed up by detailed research, this approach could be the one for you.

Important to jot down…

Whichever type of advice you choose, all financial advisers must have the same basic qualifications before they can give advice. Whether an adviser offers restricted or independent advice, they are highly regulated and must follow the Financial Conduct Authority's Conduct Rules.

If you choose Skipton, our recommendations are likely to include stock market-based investments. These are not like bank and building society savings accounts, as your money is at risk and you may get back less than you invested. The value of your investments and any income from them may fall as well as rise.

Would you like to know more?

I’m proud to say we offer a ‘No Pressure Promise’, because the last thing you need is to feel under any obligation to go ahead from your adviser. This is why our customers have the time they need to think over our recommendations, with no obligation to act. There’s also no upfront fee to hear our advice either. You only pay a charge if you decide to take up a recommendation.

So, I appreciate that I’ve thrown a lot of information at you, and you may still have more specific questions. No problem, you can call our specialist team today for a free initial consultation and have a chat about the options available to you and see if you could benefit from financial advice.