Moneygate

So what is an IFA and how do they get best investment returns?

What is an IFA? The simple answer is that IFA stands for independent financial advice or adviser. But the term IFA can be a bit of a broad church – so what does it all mean?  

Well many consumers still go directly to their bank or building society for advice on financial products, going for brand loyalty.  Meanwhile others walk in off the high street, usually on the strength of a major promotion on TV or in the newspapers.

But as Annabel Green, from national IFA moneygate.co.uk, explained, there can be limitations to searching for services from just one name. 

She said: “In general customers can only buy the products or investments of that bank or building society which may not be the best ones in the market.  Banks and buildings societies sometimes sell financial products by other providers but usually ones they do not market themselves, so they cannot be relied upon to be the best available.” 

An IFA on the other-hand can look at the whole of market before offering the customer what they believe is the best product or investment which matches personal circumstances. The product may attract charges but may be reduced depending on what is agreed with the IFA, who must offer the option of paying for their services by fee.

IFAs can also be remunerated by commission from the product, a fee paid directly by the customer or a fee which is taken on an agreed basis from the contract or product provider.  However most IFAs will offer a first meeting free of charge so a client can see if the services they offer are right for them or to make sure the IFA is right for them on a personal level.

If the job is done right, most IFA/customer relationships tend to be a long, on-going one so personality does come into it. The Government wants people to look after themselves, without having to rely on the State. This coupled with a need for individuals to be financially secure and see their dreams and hopes materialise, means that IFAs are more in demand than ever to help achieve their client’s financial goals.

Miss Green added: “It is important that we all have a financial plan that leads us to where we want to be in life and provide the money to pay for the lifestyles we want. An Independent Financial Adviser's role is to help people achieve their financial goals in the most efficient and suitable way. These could be goals for themselves and their family, or for their business.”

Everyone is different, but most IFAs will look at a range of possible products - money in retirement, investing for the future, protection (homes, people, income), financing property etc. They also take into account issues such as paying for university fees, long-term care costs, beating the tax man (within the law), divorce, marriage, holiday homes in Spain, leaving the kids an inheritance, a retirement on the golf course, etc. So they need to know all about pensions, mortgages, investments funds, investment products, income protection, critical illness cover, life cover, IHT planning, equity release, home reversions, offshore, tax exempt products - the list goes on. 

IFAs and you have a lot to talk about!  For more information go to www.moneygate.co.uk