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What is the difference between independent and restricted advice?

Understanding Different Investment Advice Types

There are 2 types of investment advice: ‘independent’ and ‘restricted’. It is also possible to obtain ‘guidance’ (or no advice).

Independent investment advice

Independent advice is based on whole of market research on all types of retail investment products appropriate to your objectives and requirements. Independent advice must be given without bias or restriction and must consider products from all providers or firms.

Restricted advice

Restricted advice is exactly that, restricted. The restriction can be on the types of products an adviser or firm is able to recommend, the provider they can recommend, or both. For example:

  • a restricted adviser may focus on one market, such as pensions, and can consider products from any provider in this market;
  • a restricted adviser may only work with one provider and consider only their products when making a recommendation; or
  • a restricted adviser may consider products from some, but not all, providers.

The Financial Conduct Authority (FCA) has provided a useful checklist of key differences between independent and restricted advice for consumers:(FCA) has provided a useful checklist of key differences between independent and restricted advice for consumers:

 Independent adviceRestricted advice
Will consider all retail investment products Yes No 
Can focus only on a particular marketNo Yes 
Can consider products only from certain providers No Yes 
Has to explain to consumers the type of advice they offer Yes Yes 
Can use 'independent' to describe the advice they offer Yes No 
Incentivised to recommend one product over another No No 

No advice 

No advice is often referred to as ‘guidance’, wherein a client is only given general information and must decide, for themselves, the most suitable.

About us

Our advice always has been, and remains, independent. For more information speak to a financial adviser who can explain more about what makes us independent.