Pinning down the value of independent financial advice

In an ever-changing world of financial products and pension provision, individuals are increasingly looking for advice on their investments. Just as they are looking for value in and return on their investments, they are looking for a quality service from their financial adviser.

The outcome of this in a competitive market is that investors need to be able to measure the value of hiring an adviser.

A good starting point is to understand the advantages of employing a financial adviser, with information on the different types of adviser provided by the Financial Conduct Authority.


Another factor to consider at the outset is whether your adviser uses IFA software. Advisers who do so may well be using IFA software via Intelliflo or another provider.

Investors will want to see added value from the use of an adviser. A recent report supported by Royal London finds that those seeking advice enjoy a much better return on investment than those ploughing a sole furrow without advice.

The report also suggests that despite the idea that only the super-wealthy can make money in the current market, advisers – including those using IFA software – are providing enhanced returns across the board.


The report looked at two groups, which were described as ‘affluent’ and ‘just getting by’. The members of the last group who had independent advice out-performed their wealthier counterparts, both in terms of liquid assets and pension wealth.

Another significant finding was that those receiving advice in both groups were more likely to have invested in equity markets than those making their own decisions.

Regardless of the above numbers, the report confirms that people still seem reluctant to seek out an adviser. The reason for this seems to be a question of trust. It may be time for the FCA to be more assertive and help investors with private plans who have little knowledge of the markets and emphasise the fact that all financial advisers are regulated.

Many aspects of investment and markets are difficult for the sole investor. Many issues come up, such as the allocation of assets into different classes and risk assessment. These are areas in which the help of an independent financial adviser can be crucial.

Individual investors must trust in an independent adviser if they are to see real growth in their portfolios.