Investors searching for “independent” advice are being contacted by “restricted” advisers who can only offer a limited pool of funds.
Lead generators that advertise on Google against terms such as “find an independent financial adviser” will pass the details on to restricted advisers, Telegraph Money has learned. A reporter put in their details on four introducer sites and was only contacted by restricted advisers, such as Tilney and St James’s Place (SJP).
Critics of restricted advice argue it can fall into the realm of sales, as advisers can be given financial incentives to sell certain funds.
Independent advisers can choose from the whole funds market, but advocates of restricted advice argue few have time to properly scrutinise thousands of funds, and that working for a larger firm enables you to select options chosen by dedicated analysts.
Karen Barrett, of Unbiased, a directory of independent advisers, said lead generators could remove themselves from Google searches for independent advice.
“Consumers need to be careful when they choose who to trust with their money,” she added. “Google can be a bit like the wild west – there is confusion. Independent financial advice is better and should give the best outcome. That could be advice to do nothing and keep saving – it should never be product sales.”
When this newspaper inquired about advice via several introducers, we were contacted by Tilney and SJP.
A call handler from Tilney followed up on a request from a website called ifa-direct.com – “IFA” is an acronym for “independent financial adviser”. When questioned, the call handler made clear that Tilney advisers were not independent.
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Jason Hollands, of Tilney, said: “Many firms of advisers and wealth managers use lead generators as part of their marketing activity. Introductions via these services are paid for out of our marketing budget and are not a cost borne by any client.”
He said it was not possible that someone could sign up with a Tilney adviser without being told they were not independent.
“Before we undertake any work for a potential client, they are sent an engagement letter setting out the details of the scope of the proposed advice and service, and a full costing of the fees for consideration and consent,” he added. He said investment decisions were based on research and not ties with any particular companies.
A spokesman for ifa-direct.com said the firm recently rebranded from IFA Direct to Financial Advisor Direct to avoid confusion. The website address remains the same and it is titled IFA Direct on Google searches.
The spokesman said it worked on behalf of 30 advisers, both restricted and independent, and that it made this clear on its website. He admitted the Google adverts were “misleading” but said the company did not negatively screen the word “independent” as this would prevent its adverts from showing.
SJP said it had contacted Financial Advisor Direct to ask for any of its partners to be removed. The firm said it made it very clear to potential clients that the advice would be restricted. A spokesman said: “We do not endorse partners’ use of any website that presents an SJP partner practice as providers of independent financial advice.”