What Is An IFA (Independent Financial Advisor)? - clearkey.co.uk
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What Is An IFA (Independent Financial Advisor)?

An IFA is short for Independent Financial Advisor. An IFA recommends financial products to their clients from financial institutes.

Independent Financial Advisors often have access to all the financial products available from most, if not all the companies in the market. Their job is to put financial plans together for clients by researching through the available financial products. The IFAs recommend or advise rather than sell you a product.

Independent Financial Advisors are regulated by the FCA (Financial Conduct Authority). The IFAs must meet precise and strict qualifications and competency requirements set by the FCA, in order to advise to their customers.

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Why Should You Consider Talking To An IFA?

Everyone wants to manage their money on their own. However, it makes sense to talk to an IFA if you have never made any investments, looking to take out insurance, a new mortgage or replace an existing one with a remortgage. Let’s take a look at a few important reasons you may want to talk to an IFAs sooner rather than later.

• You got your first job and are in your late teens or early twenties and need to put together a financial plan for your long-term future.
• You are looking for advice for personal finances such as house purchases, having children, and other investments that can be stocks and mutual funds.
• You are looking to take out life insurance, health insurance or income protection.
• You are thinking of post-retirement expenses such as long-term care fees.
• You are getting married or going through a divorce. The IFA can help minimize financial losses by bringing in more robust financial plans for you.

Why does it benefit using an IFA for these considerations?

• Access to the whole market, so they can find you the best price
• Tailored plans to suit the client’s needs
• Inside knowledge to help process applications quickly with minimal impact on your credit score

How An IFA Differs From Restricted Advisors?

Independent Financial Advisors differ a lot from restricted advisors. For a financial advisor, the competition is very tough to go and get new clients. Therefore, sometimes these advisors team up with a bigger advisory service to offer the company’s financial products to their large client base. These financial advisors are known as restricted advisors.

Most of the time, people buy financial products from restricted advisors as they work for a big financial advisory company. People are comfortable putting their faith in a big name and assume that they are going to get the best advice. However, they don’t know that they may get restricted advice on the limited range of products that the financial company offers which can sometimes result in higher product costs.

As the financial organisation handles support and marketing materials, the organization takes a percentage of what the restricted advisors earn from a client.

Independent financial advisors start their own businesses. They don’t work with or be a part of any other financial advisory organization. They are their own independent financial advisory service. It means that IFAs can choose any financial product in the market for their clients.

The IFAs create their own marketing materials and compliance and take care of everything working in the backend. Therefore, they don’t give anybody a cut or a commission of what their clients pay to them. As a result, they can research and offer a wide range of products suitable for their client’s needs with fewer fees compared to a big financial advisory service organization.


IFAs work for their own clients, listen to their concerns, and offer impartial financial advice tailored to meet their needs and requirements. The IFAs recommend financial products to their clients based on their research of the whole market to help minimise financial losses and put together short and long-term future plans for them as well.

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