The title, Financial Adviser, is always mis-used in the industry and misunderstood by the consumers.
On 10 October 2002, the Financial Advisers Act came into effect and all financial institutions are expected to comply with all its requirements from 1 April 2003, so what can consumers expect from financial advisers and their representatives? What are the likely benefits to consumers, and what are the things that they should look out for?
There are three types of Financial Advisers:
- Exempted Financial Advisor
- Licensed Financial Advisor
- Independent Financial Advisor
Before consumers seek for financial planing advice, they should be clear about what kind of advisors they are dealing with and what are the implications. The players in Financial Advisor Market are
As you can see, while Exempted Financial Advisors and Licensed Financial Advisor are allowed to distribute insurance and investment products without offering a choice. Only an Independent Financial Advisor (IFA) is required to offer choices and provide fair and objective advice and recommendations.
The article, The ABCs of the Financial Adviers Act – Guess Who, published in SmartInvestor in 2003 has more detailed discussion about this topic.