This was the title of an Article published in the Irish Independent on Thursday 28th April last.
It was an informative article on the Financial Broker market with some interesting points in relation to highlighting the different types of advisors and commission structures available. I would not strictly agree with all points however.
As per the Article, an Authorised Adviser ” … is someone who is supposed to consider all the financial products that meet your needs, and act in your best interests at all times. It makes sense to go to an authorised adviser as you will get advice tailored to your needs. You will probably have to pay a flat fee, as opposed to paying commission, which some people see as a downside. But a fee is the price for getting impartial advice”.
A Multi Agency Intermediary on the other hand is defined in the Article as; “These people can offer advice about products from a range of selected investment firms, as they have a relationship with each one”
We are a Multi Agency Intermediary. I would argue that as a Multi Agency Intermediary, whilst we hold agencies with certain investment firms and life companies, (and in our particular case we hold many agency appointments) we also tailor our advice to our clients needs. We act in the best interest of our clients at all times. This is not limited to Authorised Adviser’s.
I take the point that it may be difficult to know if advisers are acting in a client’s best interest, given that commission payments are still a main source of income for brokers. However the changing regulatory environment in recent years and a move from high commission payment structures by the life companies means that as a whole this has changed somewhat for the broker market.
While there may still be brokers influenced by commission, we believe in acting ethically for our clients sake. Our clients can if they chose pay a fee instead of opting for the commission model.
We always set out our recommendations in writing and provide full disclosure quotations which outline where applicable, commission paid. We pride ourselves on providing a financial life plan with our clients; we are here to form a lifelong relationship with our clients and offer them sound advice for their future.
So how do you know if your broker acts in your best interests?
We would recommend that you decide on your financial broker, having met a few and formed a relationship with whom you feel most comfortable with. The relationship must be about trust. Your Financial Broker does after all look after your financial life.
If your broker is happy to explain and subsequently set out the reason for any business purposed in writing, is happy to furnish you with their Terms Of Business and Quotations setting out commission earned and/or give you the opportunity of paying by means of a fee, then you can be comfortable that they are acting in your best interests.
A good Financial Broker should complete a thorough Factfinding document with you; this ascertains your personal and financial circumstances at that particular time, and makes recommendations specific to your needs whilst taking into account the affordability to do so.
A good Financial Broker will want to see you regularly to review your personal and financial circumstances in order to ensure any necessary changes are made.
By all means ask all the hard questions before signing any documentation. Make sure you are fully comfortable that you know and fully understand the implications of any policy that you are entering into. A good Adviser will know, understand and be happier to see you doing so.