Tied Agents

The 1986 Financial Services Act, which was intended to overhaul investor protection, brought in two principal types of financial adviser:

1) The Independent Financial Adviser (IFA) who sells the products of many different companies,

and

2) The company sales person (direct sales person) or Tied Agent. The company sales person has the job of promoting the products of his employer. The point is you will not receive advice from this individual about products other than those offered by his/her employer.

Just like the company sales person, a tied agent offers only the products of one company - the company to which he or she is 'tied'.

While an independent financial adviser, will in theory at least, scour the whole market, or a panel of companies to find the best pension, life insurance or national savings products for you, a tied adviser can do no more than offer you products from the company he or she represents.

Tied agents must make clear at the outset what their status is. You will see it on their sales literature as well as their stationery.

More recently a regulatory shake-up has seen the emergence Multi Tied Agents. These are financial advisers who are allowed to recommend the products of a limited selection of providers, rather than just one.

Be sure to find out what kind of business these advisers are authorised to carry out. Like independent financial advisers, tied agents must undertake examinations to ensure clients receive good advice.

They must be authorised by the Financial Services Authority .

Last Updated: June 2006 © Moneyextra.com

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