# Where can I find an Independent Financial Advisor?



## Brendan Burgess

*If you want a full money makeover go to an Authorised Advisor 
*An Authorised Advisor is authorised by the Central Bank to provide you with advice on all aspects of your finances:  investments, pensions, mortgages, taxes etc. 

If you want specific product advice on savings or investments, you could use a multi-agency intermediary.

*Pay a fee instead of commission 
*
You should treat them as you would an accountant, a tax advisor or a doctor - pay them a fee for their service. If they get paid by commission, they may well be biased to selling you a product. 

*Check their qualifications 

*Most will be *QFA*s - Qualified Financial Advisor - which is a basic qualification.  This will be adequate for most routine pension and investment issues.  The QFA is granted by the QFA Board [FONT=Verdana, Arial, Helvetica, sans-serif]which is made up of representation from The Institute of Bankers in       Ireland (IOB), The  Insurance Institute of Ireland (III) and LIA.

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*Authorised Advisors who contribute to Askaboutmoney include: *




There is an advanced qualification *Certified Financial Planner *which has been introduced into Ireland in the last few years. This is a demanding qualification and is a mark of excellence. CFPs are likely to charge a higher hourly fee than QFAs.  
Cerfitied Financial Planners who contribute to Askaboutmoney include: 
 Westlake 

A full list of CFPs can be found This list includes CFPs employed by the industry. CFPs who operate independently of financial institutions have set up the 
The Society of Financial Planners of Ireland Their list of members "will be published shortly" 

*How can I find an Authorised Advisor?

*
The Financial Regulator has a list of all Authorised Advisors and Multi-Agency Intermediaries here. But it’s in alphabetical order, so it’s not much use. However, if someone has recommended an advisor to you, you can check this list to see whether they are an Authorised Advisor or not. You can also see which agencies they have. 
*
How can I find an Authorised Advisor who is a Certified Financial Planner?
*There are very few who have this qualification. Here are two whom I know of and whose advice is generally good. 
 Westlake who is a Frequent Poster on Askaboutmoney 
Eamon Porter of whose occasional articles in the Sunday Times, have been particularly impressive. 

*Other qualifications which your Authorised Advisor might have 
*AITI - Member of the Institute of Taxation in Ireland 
Chartered Financial Planner - a UK qualification 
CFA - Chartered Financial Analyst - usually working in a stockbroking firm or investment managers


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## Brendan Burgess

*Multi-Agency Intermediaries 


*Multi-Agency Intermediaries sell the products of the 4 or 5 companies  for which they have agencies. They are not allowed to advise you on any  other product. For example, if you already have a Standar Life pension,  and they do not have a Standard Life agency, they cannot advise you on  it.

Askaboutmoney contributor SBarrett is a multi-agency intermediary and says that this limitation has few implications in practice. 

*Check their qualifications 

*
Some will have no qualifications at all, as they were working in the business before qualifications became compulsory. 

Most will be *QFA*s - Qualified Financial Advisors - which is a  basic qualification.  This will be adequate for most routine pension and  investment issues. 

*Discount brokers /execution only brokers 
*Discount brokers are usually multi-agency intermediaries. They get commission from the life company and will refund part of it to you. If you know what you want, then this is a very efficient way. 

Liam Ferguson of Ferguson & Associates is a frequent contributor to Askaboutmoney and operates both as an advisor and as an execution only broker. 

LABrokers.ie is another example .


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## Brendan Burgess

Why do I need an Authorised Advisor when I can get the advice for free on Askaboutmoney? *

Pros and cons of an Authorised Advisor
*

An Authorised Advisor will be able to go through your affairs in a much more systematic manner. A big mistake people make is asking a specific question such as "Where can I invest €100,000?". An Authorised Advisor should do an overall review of your finances, borrowings, pensions, life insurance etc, a review which you might not have thought you needed.
Many people like the face to face interaction
The downside is that you are getting only one person's opinion. Despite their authorisation, some are not very competent and you may not get good advice.
Most AAs still work on a commission basis and may well steer you towards commission paying investments.
*Pros and cons of Askaboutmoney 
*


As most of the suggestions are anonymous, you have no idea of the qualifications or experience of the person providing the suggestions.
Usually you will just get bite sized advice whereas an Authorised Advisor, will go through your affairs more comprehensively.
No matter how good an AA is, they will often not think of some important issue. Askaboutmoney is good for offering a range of suggestions.
Askaboutmoney is completely indpendent - there is no one earning commissions.
Factually incorrect information on Askaboutmoney is usually corrected very quickly. Incorrect information from an AA will usually go unchallenged.


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## Brendan Burgess

*Investment Advisors to avoid *

Stockbrokers - they are salesmen who get you to buy and sell often so as to maximise their commission 

Your bank - can sell only products from their own company and are not independent at all. 

Tied Agents - represent only one company e.g. Irish Life. 

Cornmarket Financial Planning - a broker, but it is owned by Irish Life, so it is unlikely to give you fully independent advice


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## Brendan Burgess

How to get the best value from a financial advisor

*Before using them*
Ask what their expertise and qualifications are. 
Ask if they are an Authorised Advisor or a Multi-Agency Intermediary.
Ask to pay a fee per hour. They will then refund you any commission they earn on the products.

Read up on Askaboutmoney so that you will be better informed before meeting the Advisor. 

*At the meeting
*Give them all the information they need to do a full financial fact-find. 
Don't be afraid to say you don't understand something. If they can't explain a financial product to you, don't invest in it. 

*After the meeting
*You should get a letter explaining why they are recommending a particular product. Make sure you understand why. 

*Don't ever...
*Make out a cheque to the advisor. Always make it out to the company you are investing in. Obviously this does not apply to a cheque for their professional fees.


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## North Star

The Sunday Busines Post asked me to prepare an article for them on "How to choose a Financial Adviser" 
The link is below and the article was published on March 1st 2009. It also includes a suggested list of questions you should ask your adviser.

http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=MONEY-qqqm=nav-qqqid=39883-qqqx=1.asp
  If you are looking for independent financial advice it may help clarify what you require from your adviser.  

For full disclosure, I currently operate as an Authorised Adviser, anyone reading the article may wish to bear that in mind.

Vincent Digby - QFA
www.impartial.ie


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## Jim2007

Interesting comments, over here an independent advisor means that you do no act as the fiduciary - meaning you are not responsible of custody or execution.  In fact may clients will seek advice at one bank, but go to another for custody and execution!


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## Steven Barrett

The CPC has defined "independent" as giving fair analysis of the market and will do it on a fee basis. 

I would question any adviser who sells himself on fund performance. He has absolutely no influence on the markets. An adviser may put you in a portfolio that he thinks may suit your needs and your risk tolerance but he cannot guarantee it. 

If an adviser tries to sign you up to buying a product in the first meeting, run.

I am a multi-agency provider with agencies with all the main providers in Ireland and I have not yet been in a position where I cannot advise because of my authorisation status. I have come across plenty of authorised advisers who only sell products which they have agencies with. Personally, I think the litmus test is will the work for a fee? Good advisers don't want to have to sell you something to get paid. 


Steven
www.bluewaterfp.ie


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## Marc

This is a very interesting point.

Can I truly provide client specific advice if I only have agencies with the main providers operating in Ireland? 

For the purposes of this post I am going to assume that all multi-agency intermediaries and Authorised Advisers have an agency with the main Insurance Companies operating in Ireland - which is reasonable as there is no real cost associated in obtaining an agency, the Insurance companies are keen for distribution and most brokers operate at least some, of not most of their business on the basis of commission from Insurance Companies. I am also going to make an assumption that they are all authorised to advise on European UCITS including SiCAVs, OEICs and Exchange Traded Funds. This is not a realistic assumption as I know it is not true, but since the tax treatment if all these instruments is the same it simplifies the future discussion on this thread. 

I have some serious reservations here for certain clients resident in Ireland and some of the main ones would be as follows:

US Citizens, dual US and Irish Passport holders and anyone with a US Green card living in Ireland. These people all have to file an annual tax return with uncle Sam and there is a very strong argument that these people should not be holding any European funds (note pensions are broadly speaking exempt)

Foreign Nationals (I.e. non-Domiciles) living in Ireland. If your Father wasn't born in the Republic of Ireland and subject to some other provisions, you should qualify for the remittance basis of taxation. However, funds from Insurance Companies don't qualify and therefore these may be a very poor recommendation for many people living in Ireland.

Irish residents with capital gains tax losses (say on property or bank shares) these losses cannot be offset against gains on an Insurance Company product and so again these could be a very poor recommendation for a great many people living in Ireland.

These are just some of the examples of cases we have reviewed in recent weeks where the recommendation given by the broker was not necessarily in the best interest if the client.


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## Jim2007

Marc said:


> For the purposes of this post I am going to assume that all multi-agency intermediaries and Authorised Advisers have an agency with the main Insurance Companies operating in Ireland - which is reasonable as there is no real cost associated in obtaining an agency, the Insurance companies are keen for distribution and most brokers operate at least some, of not most of their business on the basis of commission from Insurance Companies.



From my perspective most products offered by insurance companies turn out to be some kind of derivative designed to do more insurance business, rather than anything else and not alone do they represent poor value in themselves, the bring an additional complexity to the process. 



Marc said:


> US Citizens, dual US and Irish Passport holders and anyone with a US Green card living in Ireland. These people all have to file an annual tax return with uncle Sam and there is a very strong argument that these people should not be holding any European funds (note pensions are broadly speaking exempt)



Swiss banks have taken this view and will now only deal with US Citizens/Green card holders if they hold a Swiss residence permit and even then they will only be allowed to hold a current account, savings account and possibly a debit card.  In fact one well known Swiss bank has instructed it's doormen to filter out Americans that do not meet this criteria - in other words they don't even get into the bank!


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## Steven Barrett

Marc 

I also hold an agency with a company where investment losses can offset against gains and dividends are paid directly to the client, if that is what they want.  

The other issues on non nationals, isn't that your niche? 

It is not an area that I operate in so it is not an issue for me. I can still provide independent advice in that area without them being disadvantaged on a tax side.


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## Brendan Burgess

Hi Guys

I have redrafted the first four posts on this thread and would welcome comments and corrections as it is still a WIP.

It would be useful to compile a list of contributors to Askaboutmoney who are Multi agency intermediaries or Authorised Advisors. Any suggestions for the best format for this?  Separate threads for Authorised Advisors and MAIs to post replies with a short description of the following in a standardised format. 



 qualifications
Experience
type of work they do

Agencies they have
basis for charging fees?
 
Brendan


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## Steven Barrett

Brendan

An AA can't advise on mortgages unless they are an authorised mortgage adviser, a separate authorisation. 

A multi-agency intermediary can also advise on investments, pensions, taxes etc. They just cannot advise on on products that they do not have an agency with. An AA can advise on any product in the market. 

Correct me if I am wrong but advice on pensions, savings etc that is of a generic nature and doesn't refer to a specific fund or product is not regulated at all.


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## Brendan Burgess

Hi S

Thanks for those corrections which clarifies a few misunderstandings I have. 

So a MAI can advise someone that they should invest in a diversified portfolio, but if they have an ETF , they can't advise on that particular ETF? 

An Authorised Advisor (and an MAI) can only advise on investment.  Surely they can advise someone that they should pay off their mortgage first instead of investing? 

 I can find very little on the CB website, other than these definitions: 

*Authorised Advisor                  *
                A  specific type of investment business firm that can provide investment  advice on retail investment instruments, i.e. those investment  instruments set out in Section 25 and 26 (1)(a) of the IIA, without the  necessity to hold a letter of appointment and that can act as a deposit  agent or deposit broker.  In addition, it can receive and transmit  orders to a product producer from which it holds a letter of  appointment. An Authorised Advisor is obliged to recommend the most  suitable investment product available in the market, regardless of  whether or not it holds an appointment from the relevant product  producer.                  

*Multi-Agency Intermediary                  *
                A  specific type of investment business firm that may receive and transmit  orders in retail investment instruments, i.e. those investment  instruments set out in Section 25 and 26 (1)(a) of IIA, and provide  advice on retail investment instruments only on behalf of product  producers from whom it holds an appointment in writing and that can act  as a deposit agent or deposit broker.                 

*Mortgage Intermediary                  *
                A person (other than a mortgage lender or credit institution) who, in return for commission or some other form of consideration:
a) arranges, or offers to arrange, for a mortgage lender to provide a consumer with a housing loan; or 
b)  introduces a consumer to an intermediary who arranges, or offers to  arrange, for a mortgage lender to provide the consumer with such a loan.


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## Steven Barrett

Hi Brendan

Once it gets product or fund specific, an MAI can only advise on the specific fund/ product if they have an agency. Re ETF's, I have a agencies with a number of companies who provide ETF's, so I would have authority to advise on specific ETF's. Advising on whether to invest in ETF's or active managed funds isn't regulated. But if I said I advise you to invest in Zurich Life's active managed funds, it is regulated. 

The mortgages one surprised me too. As part of my financial planning service, I was going to offer a mortgage related financial plan. I had my terms of business checked by a compliance officer and was told:

"If you are advising client to alter terms of mortgage or restructure then you are providing mortgage advice and would need to be authorised as a Mortgage Intermediary"

Whether you can lay out the options to a client and let them make up their own mind, I'm not too sure, but I would proceed with caution in telling someone to pay off their mortgage without authorisation to do so. 


Steven
www.bluewaterfp.ie


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## Brendan Burgess

SBarrett said:


> "If you are advising client to alter terms of mortgage or restructure then you are providing mortgage advice and would need to be authorised as a Mortgage Intermediary"
> 
> Whether you can lay out the options to a client and let them make up their own mind, I'm not too sure, but I would proceed with caution in telling someone to pay off their mortgage without authorisation to do so.



That is bizarre, and I think it should be clarified with the Central Bank, as I am sure it is not intended. 

If I ask you where should I invest €100,000 while I have a mortgage of €200,000 @ 5%, I think it would be wrong  of you not to set out the option of paying off the mortgage. 

I can't imagine that the Central Bank would reprimand you for giving good advice. But then, you never know.  The CB are great on rules. If they see a rule being broken, they are confident. They are not good at exercising judgment.


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## Steven Barrett

I sent the CB an email seeking clarification. I'll let you know what they say. 



Steven
www.bluewaterfp.ie


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## Brendan Burgess

Just when I thought I had cracked the difference between AAs and MAIs, it appears that the CB is going to scrap the distinction. 

[broken link removed]



> 2. Key Proposals for Consideration It should be noted that while other minor amendments may be included in the revised Handbook, the Central Bank welcomes your views on the following key proposals:
> 
> Reclassification of AAs and Restricted Intermediaries including MAIs – It is proposed that they be reclassified as ‘Investment Product Intermediaries’ (IPIs);



“The  terms MAI and AA were created specifically for insurance intermediaries  following discussions with industry representative bodies in 2001.  During 2008, a Working Group comprised of the then Financial Regulator  and members of the industry representative bodies was set up to  consider, inter alia, intermediary categorisation. The Working Group  recommended that the terms MAI and AA should be discontinued. 

Consumer  research at the time indicated that the term most commonly used and  understood by consumers is ‘broker’ and that consumers are not familiar  with the different categorisations in use, such as MAI and AA. The  recommendations of the Working Group regarding the criteria for the use  of the term ‘broker’ have been implemented through the Consumer  Protection Code 2012 and, therefore, the terms MAI and AA are now  essentially redundant. In addition, these terms have no basis in  legislation. We propose, therefore, that intermediaries authorised under  the IIA will be categorised as ‘investment product intermediaries’, as  set out in Section 25 of the IIA.”


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## Monksfield

Think S Barrett should get clarification in relation to ETFs.

I think he is mistaken in believing that he could give advice on what are collective investment schemes.


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## Dr.Debt

In my experience its not the qualifications of the advisor that will guarantee you a better outcome. Its always better to seek out an individual with a good reputation than
an individual with a good qualification. Qualifications are hit and miss at the best of times.


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## Steven Barrett

Monksfield said:


> Think S Barrett should get clarification in relation to ETFs.
> 
> I think he is mistaken in believing that he could give advice on what are collective investment schemes.



My Statement of Authorised Status from the Central Bank:

Bluewater Financial Planning Limited (‘the firm') (Ref. No. 118735) is 
authorised under Section 10 of the Investment intermediaries Act, 1995 (as 
amended).

As a Multi-Agency Intermediary, Bluewater Financial Planning Limited is authorised to receive and transmit orders to product producers from whom a written letter of appointment is held, in relation to: 

1. Shares in a company or bonds that are listed on a stock exchange, prize bonds

2. Units or shares in undertakings for collective investment schemes, including unit trusts and UCITS

3. Tracker Bonds 

4. Insurance  

5. Personal Retirement Savings Accounts (PRSAS) 

The firm is also authorised to act as a deposit broker and to give advice in relation to deposits. 

The firm may also give investment advice only in relation to investment instruments available from those product producers from whom an appointment is held. 

When receiving and transmitting orders in relation to insurance policies and/or 
PRSAS, the  may only accept cash or cheques/bank drafts from clients payable to itself where: 

(i) an insurance undertaking has invited renewal of a policy of insurance, or 
(ii) a proposal for insurance and/or PRSAS has been accepted by an insurance 
undertaking.

In all other circumstances cheques/bank drafts or other payment instruments must be made payabie to the product producer.


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## Bronte

Marc said:


> US Citizens, dual US and Irish Passport holders and anyone with a US Green card living in Ireland. These people all have to file an annual tax return with uncle Sam and there is a very strong argument that these people should not be holding any European funds (note pensions are broadly speaking exempt)
> 
> .


 
You're all in agreement on this, but why shouldn't American's be allowed to invest in European funds?  Just because they have to file an American tax return?


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## Steven Barrett

Brendan Burgess said:


> That is bizarre, and I think it should be clarified with the Central Bank, as I am sure it is not intended.
> 
> If I ask you where should I invest €100,000 while I have a mortgage of €200,000 @ 5%, I think it would be wrong  of you not to set out the option of paying off the mortgage.
> 
> I can't imagine that the Central Bank would reprimand you for giving good advice. But then, you never know.  The CB are great on rules. If they see a rule being broken, they are confident. They are not good at exercising judgment.



The response from the CB to my question:

_In order to give advice on mortgage products and services, you would need to be authorised as a mortgage intermediary under the Consumer Credit Act 1995._

Doesn't tell you much. Proceed with caution...


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## Marc

Bronte says:

"You're all in agreement on this, but why shouldn't American's be allowed  to invest in European funds?  Just because they have to file an  American tax return? 		"

The new FATCA agreement transforms the reporting and compliance tools available to the IRS. U.S. persons living in Ireland will have to pay new attention to many long standing reporting and filing rules that have been widely and safely ignored until now i.e. FBAR or PFIC. Failure to comply with these rules has very rarely been an issue because they were virtually unenforceable. With FATCA's new reporting mandate via the Inter-Governmental Agreement with Ireland all this will change.


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## Monksfield

_The firm may also give investment advice only in relation to investment instruments available from those product producers from whom an appointment is held.
_

In saying the above you have confirmed that you could not advise on ETFs since you do not get agencies from ETF provider : you can advise on insurance company products. Everything else (such as collective investment schemes, shares ) is receive and transmit.

 I don't know SBarrett and he/she may be one of the very excellent MAIs out there but people need to understand that the scope of what they can advise on is very restricted.


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## Marc

Hi Monksfield,

You are correct that you do not obtain agencies with ETF providers. Since they are "exchange traded" an adviser needs an agency with an execution venue.

I have previously checked this specific point with the Central Bank and they advised that advisers can hold agencies with other intermediaries who are themselves authorised to act as an execution venue. Provided that the advisers themselves are authorised to advise on the underlying securities.

When providing our portfolio services to other intermediaries we require the adviser to obtain from the Central Bank specific authorisation for items 1 and 2 listed on S Barrett's statement of authorised status.

1. Shares in a company or bonds that are listed on a stock exchange, prize bonds

2. Units or shares in undertakings for collective investment schemes, including unit trusts and UCITS

As we are a "Master Broker" or "Product Provider" in the lexicon of the Central Bank, this means that we can act as an aggregator/execution venue to receive and transmit orders in transferable securities and UCITS from other advisers who are themselves authorised to advise on these securities - even if they themselves do not have an agency with the underlying fund managers.


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## Jim2007

Bronte said:


> You're all in agreement on this, but why shouldn't American's be allowed to invest in European funds?  Just because they have to file an American tax return?



In a nutshell, the new US tax laws place heavy administrative burdens on anyone providing financial services to a US citizen or green cardholder.  Right across Europe financial institutions have simply decided, as is their right, to stop doing business with such persons and avoid the costs and potential penalties if they get it wrong.

From a financial services point of view US Citizens, Green card holders and partners or children of such people are becoming toxic! Some of the things I've come across so far:
- Swiss banks turn away anyone who meets this criteria, often by the doorman!
- About 6 months ago Swiss banks sent a letter to all such person they could identify, giving them 3 months to close their accounts or they'd do if for them
- The Swiss Post bank issued a letter to anyone had opened a children's gift account, telling them that if the intended child lived outside the EU/EEA they must close it within a month or it would be done for them
- The number of US citizens given up their citizenship at the US Embassy in Bern has gone from less than 100 a year ago to over 2,000 this year so far.

For a financial institution, the penalty for failing to comply include having their US licence withdrawn and being unable to deal in US government securities of one type or another.   Pretty much every financial institution needs to be able to interact with the US banking system and trying to develop an kind of investment product without access to US government securities is extremely challenging.  So they are all playing save on this one.


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## joiedelivre

Am I being naive or are those worried about the US crackdown worried because their advice doesn't stack up with new controls: 'if they get it wrong'?  And isn't it the lack of such controls that got the world in the mess we're in now? I work in Ireland, have 2 passports, return tax forms to both countries and haven't had any difficulties...so its sounds like scare-mongering to me...


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## Steven Barrett

Monksfield said:


> _The firm may also give investment advice only in relation to investment instruments available from those product producers from whom an appointment is held.
> _
> 
> In saying the above you have confirmed that you could not advise on ETFs since you do not get agencies from ETF provider : you can advise on insurance company products. Everything else (such as collective investment schemes, shares ) is receive and transmit.
> 
> I don't know SBarrett and he/she may be one of the very excellent MAIs out there but people need to understand that the scope of what they can advise on is very restricted.



Monksfield

I have agencies with companies who act as an "execution venue" as Marc describes. 

When applying for the various levels of Central Bank authorisation, they do ask you who you will be seeking agencies off so that you can provide advice in each area.


I'm a he by the way, the S stands for Steven


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## Titan

Dr.Debt said:


> In my experience its not the qualifications of the advisor that will guarantee you a better outcome. Its always better to seek out an individual with a good reputation than
> an individual with a good qualification. Qualifications are hit and miss at the best of times.



I would agree with you there but how do you go about finding someone with a good reputation if your not familiar with this area or you don't know anyone that can point you in the direction of someone with a good reputation?


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## Gerry Canning

joiedelivre said:


> Am I being naive or are those worried about the US crackdown worried because their advice doesn't stack up with new controls: 'if they get it wrong'? And isn't it the lack of such controls that got the world in the mess we're in now? I work in Ireland, have 2 passports, return tax forms to both countries and haven't had any difficulties...so its sounds like scare-mongering to me...


 ...........................................

There was a good article in Economist a few weeks back.
It does appear that the US rules are complicated and should you get it wrong you will be hammered by them .


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