Glossary · UK
What is Independent Financial Adviser (IFA)?
A financial adviser who must consider products from the whole of the relevant market, rather than a limited panel, before making a personal recommendation.
Full Definition
An Independent Financial Adviser (IFA) is a financial adviser, authorised and regulated by the Financial Conduct Authority, who gives independent advice -- meaning they must consider and be able to recommend products from the whole of the relevant market, across all the main product providers, rather than being limited to a specific panel or a single company's own range. This is the key distinction from a restricted adviser, who may specialise in, or be limited to, a smaller range of products or providers (which can still be entirely appropriate advice, but must be disclosed to the client upfront as restricted rather than independent). Under the FCA's adviser-charging rules, both independent and restricted advisers must be paid an explicit, agreed fee by the client for personal recommendations rather than being paid commission by product providers, which was banned for most retail investment advice by the Retail Distribution Review reforms that took effect at the end of 2012. Common areas an IFA advises on include pensions and retirement planning, investments, Inheritance Tax planning, and mortgage and protection advice, and firms or individual advisers must hold specific FCA permissions and qualifications (typically at least a Diploma in Regulated Financial Planning) to describe themselves as independent.