It appears that people searching for independent financial guidance online are in fact being led towards restricted advice, which is another proposition entirely. Here, Lee Goggin, Co-Founder of findaWEALTHMANAGER.com, explains why our matching service is different to others you might come across.
The web is now teeming with so-called “lead generators” that – on the face of it – give investors a fast route to independent financial advice. However, it has emerged that the reality might be very different in some cases.
The internet is now most people’s first port of call when they are looking for goods and services, and wealth management is no different. Indeed, when we launched back in 2012 our aim was empower High Net Worth Individuals so that they could quickly navigate a crowded market and compare firms side-by-side, just as they would with insurance and so on. Since then, we’ve matched thousands of individuals to leading wealth firms, so we know we were on the right track.
But while we fervently believe that people should be looking online for financial advice, I’d like to remind readers that where you look is crucial.
Reports are currently swirling that several of these lead generator sites appear to be funnelling users to firms offering only “restricted” financial advice, when what the person is likely to have searched for is “independent financial advice” or similar. And, although the companies in question have been quick to say that investors are always made aware when advice is restricted, the affair has highlighted several important issues for investors.
Restricted vs. independent
The first is the important distinction between restricted and independent advice. As the name suggests, in the former case an adviser will only be recommending investment products or providers from a restricted list, whereas independent advisers are looking at the entire universe.
Although it would be easy to assume that the former is the inferior option, it is important to note that this is not necessarily the case. Proponents of this model argue that restricted advisers may be advising on fewer investment options, but are likely to have a better understanding of them, for instance. Some very well-respected firms have chosen only to offer restricted advice too, often citing faith in their own investment products.
However, it is worth bearing in mind that restricted advice does have its critics, who point to the risk of advice coming perilously close to sales. The fact that some restricted wealth managers have come under fire for offering sales incentives to their advisers will have strengthened their case.
Secondly, this furore has highlighted why you shouldn’t necessarily go with the first result from an online search, since these might be simply the companies that have bid highest on certain search terms, rather than those that best match your needs. Thus, you could search for “independent financial advice” and end up being pointed towards restricted advice instead.
Nor does a top search ranking confirm anything about a firm’s investment prowess. In fact, some of the very best providers keep a pretty low profile, which means you may encounter their names for the first time when you search the market with us.
It often surprises people to learn that an “Independent Financial Adviser” could be offering restricted advice, although regulation dictates you should certainly be informed that this is the case. And, while restricted advice doesn’t necessarily indicate conflicts of interest at all, it is important that you are making an informed decision here.
We would advise keeping an open mind and interrogating any potential provider on their advisory status. If a restricted adviser can evidence strong performance and competitive fees, then all to the good; if you have reservations as to the alignment of interests, it may pay to look elsewhere.
Our panel represents scores of the UK’s leading wealth managers and every style of firm you could wish for, from the large and bank-owned to the niche boutiques. So, whether you are an unhappy client looking for a change or someone entirely new to wealth management who is looking for a fast way to filter reputable providers down to a shortlist, we can help.
The important thing is not to let a lead generator lead you down a path unawares. We prefer to put you, the investor, in the driving seat.