An independent financial advisor (IFA), is someone who provides independent advice on financial affairs, irrespective of the financial topic. Generally the advice will concern either a single aspect of a financial product or may encompass wider market issues, but in all cases they will be advising on these based on their client's individual situation and financial status.
Before you begin, you should be aware that there are two specific types of IFA, each with their own and different value to bring to your financial discussion.
- Independent financial advisors (IFAs): A truly independent advisor will be able to provide advice and insights into the market as a whole. They will be able to provide products from a wide variety of financial product providers and as such should be able to tailor their advice and recommendations to your personal situation and needs.
- Restricted advisors: A restricted advisor is one who is normally tied in with one or two specific financial product advisors and therefore will be limited in the actual product recommendations that they can offer as solutions to your personal needs.
We recommend that you ensure that you understand the scope and capability of your IFA before proceeding with any financial discusssions as this may affect the amount of information that you have available when making your decision about what actions to take or financial commitments to make.
A good IFA will have 'done their apprenticeship' and will be qualified and certified in the area of finance you are interested in.
What can an Independent Financial Advisor help me with
The world of finance is diverse, but for personal financial planning you should be able to get advice in the following areas and of course, be sure to esnure that your IFA is able and competent to advise in the area of finance you are interested.
- Financial planning: Dealing with financial assets and tax issues, ( especially for expatriates ), can be complex and there are innumerable products and strategies for dealing with assets for both current and inheritance planning.
- Investments: Understanding your attitude to risk is then applying this to the correct investment strategy. Trying to second guess the market may not be for you so taking informed advice on how to approach investments is recommended.
- Mortgages and Equity Release: whether you are planning to invest or already have your money invested in property and buildings financial advice can be instrumental in making the most of your investment either in gaining a mortgage suitable fo ryour requirements or to enable the release of equity for other uses.
- Pensions: Of course planning for retirement is always something we put off till later, but as everyone will tell you, the earlier you plan for your future, the better your financial health will be in retirement.
- Insurance: Whether you have bought a new car, purchased a villa or looking for critical illness cover, you willwant to esnure that you can get the best policy for you. Advice is recommended as these are complex financial products often with exceptions or penalties that if misunderstood can become costly when you need the insurance most.
The areas listed are not all of the topics that canbe covered by an independent financial advisers in the UAE, but as the subject is so diverse, we are unable to cover everything here.
How much will it cost me?
As we have said, financial advice is not free but there are different ways you may be asked to pay. These include:
- Commission-based: This is a very common practice of payment where an IFA will receive payment from a product provider, such as a mortgage, personal loan or investment, if you purchase the product through them. Under certain conditions you may find you pay a percentage of the initial product cost and also a lower recurring charge, so check the small print when investing to ensure you understand exactly how much of your money will actually be invested for you.
- Fixed fee: This type of charge is normally pre-agreed and applies to a specific project, great if you are not looking for a long term commitment or arrangement with your IFA.
- Pay As You Go: This model is similar to the way most professionals, such a solitors and accountants, charge and is an increasingly more popular way for IFAs to charge. Consequently, you will find you will pay by the hour, so understanding what work is being done and how much it will cost is of increased importance and obtaining a full breakdown of costs is recommended.
For further information, or you would like to talk with an Independent Financial Advisor with no obligation whatsoever, please request a call back and one of our independent advisors will get back to you..