why do I need a financial adviser??


why do I need a financial adviser?

Economie strongly recommend that you contact an authorised financial adviser to assist you with your ethical investment decisions. Especially for the less experienced investor it is always advisable to consult an authorised financial adviser who can advise you on the financial products available and help you select the ones that best suit your needs, as well as completing all the transactions on your behalf. A financial adviser can help clarify your financial priorities and your short, medium and long term financial goals. They ask detailed questions about your financial situation, your existing investments, debts, state of health, future goals, risk tolerance and what you want from life. Then they will advise you on how to develop a budget and guide you on how to manage your finances and help your money to grow for the future whilst ensuring you are financially protected. If you are considering SRI it is also important to remember that not all financial advisers have SRI expertise. SRI in itself is a complex and rapidly changing field. An ethical financial adviser additionally needs to have an excellent understanding of their client's ethical concerns and SEE issues in general in order to recommend the most suitable SRI products. Therefore ethical investors should seriously consider a financial adviser with specialist knowledge of SRI. If appropriate your adviser can introduce you to a stockbroker who specialises in ethical services for investors with L100,000 or more to invest or with an existing portfolio, perhaps of inherited Buildings Insurance shares.


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how do I find a financial adviser and where do I find one who specialises in SRI?

* Where to find a financial adviser? - There are several ways you can find authorised financial advisers. Most are listed in the phone book, some advertise in newspapers or on the internet, others can be accessed via banks and building societies, and the majority of Independent Financial Advisers in the UK are listed by IFA Promotion (IFAP). Although IFAP are able to give you the names of three independent financial advisers in your locality (call them on 0800 085 3250 or visit ), they do not currently list them according to whether they specialise in SRI. All financial advisers have to be authorised by the Financial Services Authority, and you can check the FSA Central Register at or phone 0845 606 1234. It is important to remember that ethical financial advisers are still very much in the minority, and so when you contact an adviser you should check that they have expertise in SRI. For example, do they have the Economie SRI kitemark, showing that they have passed the Economie SRI foundation and Intermediate examinations?(currently the UK's only SRI qualification)
* Finding an SRI financial adviser via Economie - Economie do not provide financial advice and we are not regulated by the Financial Services Authority. However we support and train a wide range of SRI Financial Adviser Partners* across the UK, without being associated with any one particular company or group. It means we're able to offer an impartial and comprehensive service - putting you in touch with an authorised financial adviser with proven specialist knowledge of SRI who matches your specific requirements and within your own locality. All our Financial Adviser Partners* must demonstrate their SRI competency by passing the Economie Foundation and Intermediate SRI examinations (the UK's first SRI exam), and are required to engage in a continuous professional development programme of SRI training and education. They also agree to abide by a Code of Conduct and Economie verify that they are authorised to give advice by the Financial Services Authority (FSA). It means you enjoy peace of mind, specialist ethical advice and the convenience of going via one organisation that vets a number of SRI financial advisers. For more information about this service please see Individual Investors. If you would like to be put in touch with one of our SRI Financial Adviser Partners* in your local area ring us on +44 (0) 870 366 1531 or complete the form at Find an SRI Financial Adviser .

* For a full explanation of this term see Glossary

I've heard the term 'depolarisation' and that there's been a major shake-up in the way financial products are sold. Can you explain the changes?

The new rules were introduced by the regulator, the Financial Services Authority (FSA) on 1st December 2004. The overhaul or 'depolarisation' of the provision of financial advice in the UK is aimed at improving customer choice but in so doing does make things more complicated. The key change is that financial advisers will no longer be restricted to offering only the products of the bank or insurance company that employs them. Instead all advisers will be able to offer products from different providers. Consumers will also get a clear choice between paying by fees or commission. The following is intended as a short guide to what these changes to the UK financial services industry mean for the consumer seeking financial advice.

the previous system 'polarisation':

Under the previous system (known as 'polarisation'), in place since the late 1980s, there were only two types of financial adviser - independent or tied. An independent financial adviser acted as the agent of the customer and had access to the entire market when selecting financial products. The tied adviser (typically from a bank or building society) could only offer products from their company range and acted as the agent of their company. This relatively simple system was designed to make a clear distinction between independent financial advisers (IFAs'), who were not tied to any firm, and financial advisers who were employed by a bank or insurer. However there were those who argued that as a result, people who went to see financial advisers may not have been sold the best product in the marketplace, just the best that the adviser's employer had to offer.


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A number of new types of financial adviser category are being introduced:

* Independent financial advisers will remain in place. However, to be called 'independent' the adviser must offer products from the whole of market and offer their client the choice of paying for their services by fee as well as the option of paying by commission. They act on your behalf.

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* Financial advisers who do not offer the fee option will be known as 'whole of market' advisers. They will not be allowed to use the term 'independent'. Again they act on your behalf.
* 'Multi-tied' advisers are a new type of adviser and will offer products from a limited range of providers rather than just one. They act on behalf of the product providers.
* 'Tied' advisers will also stay in place and will only be able to offer products from one provider. Again they act on behalf of the product provider.

Only independent financial advisers are required to offer clients a fee payment option, though other advisers may choose to. It will also be possible for a financial adviser to be dual authorised - starting the advice process as a 'multi-tied' adviser and moving onto being 'whole of market' or 'independent' if the circumstances require it.

The other key change is that your financial adviser will have to fully disclose their status, their services and their charges by giving you two documents at the outset: 'Key Facts About Our Services' (also known as the Initial Disclosure Document) and 'Key Facts About The Costs of our Services' (also known as the Menu). This is intended to enable consumers to properly understand the value and cost of the adviser's proposition, and to shop around for the best type of advice for them.

What the law says 

"Guarantee that the broker monitors sales and that they can demonstrate a training and competence scheme is in place."

Anyone who offers credit must be licensed by the Office of Fair Trading.

Most credit agreements for amounts of £25,000 or less (£15,000 or less between 19 May 1985 and 1 May 1998) are covered by the Consumer Credit Act 1974. These are called regulated agreements and if you have a regulated agreement, you are entitled to: -

  • have specific information included in your agreement, such as the amount you are borrowing, the length of the agreement, interest rates, any charges, the amount and frequency of payments and your cancellation rights (if applicable -see below). It must also include the total charge for credit and the Annual Percentage Rate (APR), which is the annual cost of credit after interest and all other charges have been added together. If this information is not included, the agreement may be unenforceable
  • be given a copy of the agreement, which is not binding until signed by both you and the creditor
  • be sent a statement or copy of other documents on request. You may have to pay a small amount
  • be informed of the procedures to be followed, such as sending you a default notice, before court action is taken.


Economie now subscribe to The Lending Code; copies of the Code can be obtained from