`Best Advice'

Under the Financial Services Act, advisers are obliged to give 'best advice' - though precisely what this means in practice is the subject of some debate. Broadly, independent advisers must monitor all the products on the market and regularly review them so that they can recommend to you a specific company's product which seems best suited to your needs. A 'tied' adviser can consider only the range of products of the company they represent and recommend the most suitable from those - if none is suitable, the adviser should tell you.

TIP - Don't assume your adviser is giving bad advice just because they don't recommend the investments or companies at the top of the performance leagues. Past performance is no guide to the future; and a good adviser should be taking account of a whole range of factors, such as measures and indications of the financial soundness of the companies, the aims and level of risk inherent in their different investment strategies, the level of expenses and charges, and so on.

All customers seeking low-cost endowment mortgages might be recommended just one insurance company's policy. The product to be recommended must be reviewed from time to time, and a new company's product chosen if this would be better. In the absence of this interpretation, you would probably have been offered a short list of two or three different companies. Don't accept the recommended product if you're not happy with it - go to another adviser who's willing to give you a choice.

Independent Advice Or Not?

An important point to consider before making your choice is whether you are happy to consider the products of just one company, or whether you want independent advice about the full range of products available. Under the Financial Services Act, all investment advisers must give advice on one of those two bases. For example, a few banks and the odd building society offer independent advice through their branch network. Most other banks and building societies have decided to tie themselves to a single insurance company for the purpose of selling life insurance and pensions through their branches, though... see: Independent Advice Or Not?

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