Fee Based Independent Financial Advisers (IFAs)

Most financial advisers earn their living by taking a commission from the life insurance or investment companies whose products they sell. This commission must be disclosed to the client. The system has, it can be argued, worked reasonably well.

That said, many investors fear that advice from an independent financial adviser or a tied agent will be coloured by his or her need to earn commission. It is clear this has happened in the past with the result that vulnerable investors have been badly disadvantaged.

So, some independent financial advisers offer their services on a 'fee based' basis in much they same way as do accountants and solicitors. They charge the client by the hour or agree a 'one off' fee upfront. Any commission earned is then rebated. This can make a lot of sense in view of the fact there are financial products which would suit you which don't pay your adviser to recommend them.

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Last Updated: July 2007 © Moneyextra.com

Our senior editor Robin Amlôt recommends you should consider taking independent financial advice before acting on any article. Please contact us for help with your individual circumstances if any assistance is required.