Is their such a thing as a truly independent financial advisor, and are there any in Birmingham?

Question

Birmingham UK

Answer 1

Yes, there is such a thing, but they are expensive; if you don't take commissions on sales, you still have to make money somehow. So independent advisors either charge you an hourly fee for any consulting-type work they do for you or receive their compensation as a percentage of assets they manage for you and/or a percentage of profits they make for you. Advisors that charge management fees usually have a rather high minimum account value requirements (seven figures is the norm, eight figures is not unheard of).

As to whether there is one in Birmingham, which Birmingham are we talking about, the one in England or the one in Alabama?

Answer 2

An independent advisor simply means they are not working for one of the financial firms, they may still contract with these firms to provide services but the firm is not paying for their office and other expenses. There are many of these and also some companies that allow independent advisors to franchise their names, these are still independent because they are not technically employees of the firm but rather are paying a franchise fee. They could easily swith to another company if they wanted to with no problems. Companies such as Ameriprise, Edward Jones, John Handcock and many others allow franchising so look these up as a starting point.

Perhaps what you are really asking about is fee only advisers. These are advisors who are not selling products but are solely selling advise. They are presumed to be unbiased because they charge an hourly fee regardless of if you listen to them or what the recomendation. It seems to make sense to me that these advisors are going to give unbias advise because they do not gain from sending you to one product over another or one company since they usually let you get the product on your own. They benefit from giving good advise so you send referrals and come back yourself at a future time. They are not getting commisions that could be larger from one product rather than another. I am not sure where to look for these advisors but if you look up Certified Financial Planner the organization that awards this designation would be a good place to start.

Answer 3

In the case of FA's the word "independent" is relative. It simply means they are not directly employed by a some provider. But they can still accept commissions and one company may pay more than others.

The best you can do is to agree to pay them an hourly fee, which is about £250 per hour and not take commission. But even then there is plenty of room for bias because of presents, prizes, hospitality, and other voluntary payments. And if you give them authority to manage your investments, the hidden deductions will destroy you.

It is a rotten system, and it needs complete overhaul, but the government dares not upset this very powerful industry and its associated bodies, especially as there is no public outcry.

Answer 4

Certainly there are independent advisors, but finding one that your certain is independent is another matter. Whoever you choose, please consider the following:

o Selling you "load" funds is very profitable to the seller and might cloud their judgment.

o Churning your portfolio (a lot of buying and selling) is profitable to the broker executing the transactions

o Never, never give an advisor or broker the authority to trade on your behalf. Always authorize any trades personally

o Research or evaluate any recommendations made, before authorizing the trade. If you can't understand the reason for the trade, don't authorize it.