Types of investment adviser

Find out about the different types of investment advice and what an independent or restricted adviser could offer you.

If you are looking to get advice about investing your money, there are two different types of financial advisers – independent and restricted. 

The type of adviser you choose can affect the advice you are given.

  • Independent advisers offer a wide range of financial products and providers.
  • Restricted advisers will generally focus on a limited selection of products and/or providers.

All financial advisers must be approved or authorised by us. Both independent and restricted advisers must pass the same qualifications and meet the same requirements to ensure they are providing suitable advice.

An adviser or firm must tell you in writing whether they offer independent or restricted advice. If you are not sure what they offer you should ask for more information. Read more about finding a financial adviser.

Independent advisers

An adviser or firm that provides independent advice can consider and recommend a wide range of retail investment products that could meet your needs and objectives.

Independent advisers will also consider products from a wide range of firms across the market, and will give unbiased and unrestricted advice.

An independent adviser may also be called an 'independent financial adviser' or 'IFA'.

Restricted advisers

A restricted adviser or firm can only recommend certain products, product providers, or both.

The adviser or firm must clearly explain the nature of the restriction. If you are not sure about the offer you should ask for more information.

Some examples of restricted advice are where:

  • the adviser works with one product provider and only considers products from that company
  • the adviser considers products from a limited range of product providers
  • the adviser is unable to review existing products that you may already have in place.

Restricted advisers and firms cannot describe the advice they offer as 'independent'.

Other types of financial advice

If you are only given general information about investment products - or have had products or related terms explained to you - you may have received guidance rather than advice.

This is sometimes also called an information only or non-advice service.

The main difference between guidance and advice is that you decide what product to buy without having one recommended to you.

Buying an investment product in this way might reduce the cost involved, but it also means you may not have access to the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) if things go wrong.

If you are not sure whether you are receiving guidance or advice, and therefore how you would be protected, you should ask the adviser or firm to explain.

Read our guide to understanding the different between ‘advice and ‘guidance’ on investments.