If you are in need of financial advice, you will probably go to the internet and put into a search engine “free financial advice”. But is financial advice ever free? Or is any attempt by IFAs or banks and building societies to offer free financial advice in fact an attempt to hide charges within products to give the illusion of free advice.
The only places that you can get free financial advice is from charities or Government-run organisations like the Citizens Advice Bureau, the National Debt Line or the Money Advice Service. But even then it should also be remembered that these services often provide information only and their advice is either specialised in debt management or limited to information only when it comes to pensions and investments.
The FSA recently carried out a mystery shopping exercise of six high-street banks. During the course of this review, one of these banks was referred to enforcement as some of their advisers stated that: “You do not pay us a penny for the advice.”
The major problem here was that the product being sold had a charging structure and the bank was receiving commission from this product.
But it is not just the banks which have presented themselves as offering free financial advice.
I recently reviewed a Google advert for free financial advice by a well-known lead- generation firm.
It is clear that the FSA needs to start taking action against some of these adverts as they are misleading.
If you were to click on this advert, you are then taken through to a page where you are asked for your contact details for your “free consultation”.
It is obvious that this company is selling the data on to IFAs for a profit and it is also obvious that the IFAs will have to charge for their advice at some stage.
So how is it that the advert for “free financial advice” is allowed?
It clearly breaches both the Advertising Standards Authority rules and the FSA’s rules on misleading adverts?
We have seen an increased level of lead-generation companies operating online and the FSA needs to take action against these companies as they clearly do not possess authorisation from the FSA to offer financial advice.
In my opinion, these companies are confusing consumers as many of them are totally unaware that their data is being sold to third parties.
Essential IFA does not claim to give free financial advice, we are a charging service and offer a high standard of customer service and good unbiased independent financial advice.
We will offer all new clients a free initial consultation, where we will assess a client’s needs and then give a quotation of how much the advice for their particular situation will cost.
Our minimum fee for advice starts at £250 and if a client is looking to invest funds in equity-linked investments we charge 3 per cent of the investment as an initial charge.
Also, a 0.5 per cent fund-based ongoing maintenance charge that gives clients unlimited phone advice and entitlement to one financial face-to-face review together with ongoing expertise and recommendations for that investment.
These charges are typical of the industry and clients should be aware that there is no such thing as “free financial advice” within financial services.