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Types of Financial Adviser

It is very challenging for a financial adviser to understand and advise on such a wide range of complex issues and product features, so only some give this overall advice service. Other advisers decide not to offer this holistic service but specialise in certain areas instead.

Financial advisers who give wide ranging advice on all or most different areas of financial planning are known as General Practitioners (GP’s). They will have a good and comprehensive knowledge of most product areas and be able to give sound and accurate advice on a range of products. The advantage of a GP is that they can look at your overall financial profile and give advice on everything and link it together in one comprehensive financial plan. It means that you can work with the same adviser for any area of advice and build up a long term planning relationship with them. The difficulty of offering general advice is that it is highly demanding for the adviser to keep up such detailed knowledge in all aspects of financial planning. To assist them in their knowledge they may have people who work for them known as paraplanners who do some or all of the technical research for the adviser so that the adviser can then discuss the findings with you.

In recent years, the most common area for advisers to specialise in has been mortgages. There are a large number of mortgage advisers in the UK and they give advice on mortgages and other products involved in the mortgage process such as life insurance or buildings and contents insurance. They cannot give advice in other areas as they are usually not qualified. The advantage of mortgage specialists is that these advisers have decided to specialise in the mortgage market and will have a comprehensive knowledge of the range of available mortgage products and other associated products. The downside is that these advisers will not be able to do all of your financial planning for you and you may need to see another adviser for other areas as well as mortgages.

Mortgage advisers are not the only advisers who specialise in a certain area. Some advisers decide to specialise in the corporate market for businesses and employees whereas others focus on individuals in areas such as investments, pensions or inheritance tax planning. The advantages and disadvantages are as previously described, in that specialists may have better and more comprehensive knowledge and understanding of their chosen area of specialism. On the other hand, they do not offer the holistic overall financial planning relationship to their clients.

Many medium to large financial advice firms may offer a combination of general and specialist advice. You may be able to have a general financial planner who works with you on a regular basis to develop your finances but refers to specialists within their firm as and when it is necessary. This way you may get the best of both the adviser relationship and the level of technical advice that you require.

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