A TripAdvisor-style website where people can find, rate and review independent financial advisers has been launched.
VouchedFor.co.uk will allow clients of the UK's 20,000 IFAs to leave reviews - good or bad - of their experience.
People can search for an IFA
as well as searching for particular specialisms, such as mortgage, investment or pension, by town or postcode. They are then presented with a list of IFAs near where they live together with scores out of five - based on quality, service and value for money - and customer reviews.
There are currently 250 IFAs on the website, and 400 clients have left reviews. However any clients of IFAs not yet featured on the website can still rate and review their experience.
Adam Price, formerly at Barclays, set up the website last year. He says he had the idea because despite working in the investment industry, he didn't know where to direct friends to find the right financial adviser. He expects the number of IFAs featured on the website to reach 500 soon.
Price comments: "There's huge demand for good financial advice, but people don't know who to put their trust in. There's around 20,000 IFAs in the UK, generally operating in small firms and only known to existing clients.
"Our research suggests there are 7.4 million clients out there who would recommend their financial adviser. VouchedFor gives them the platform to do so."
The launch of the website comes a few months before the Retail Distribution Review comes into effect, which will see IFAs banned from taking commission from product providers. They will instead have to agree an explicit fee with the client before giving advice.
Price says that while this change in how advice is paid for will increase consumers' trust in financial advice, "people will want added assurance
that the adviser they choose is worth their fees".
According to a YouGov study commissioned by VouchedFor, which polled 2,272 adults, only 21% of people believe it is easy to find a well-recommended financial adviser.
Price says it took a while from building the pilot site last year to launching it to the public this year as he wanted to make sure the website had robust anti-fraud processes to ensure the reviews were left by real clients.
When a review is left, VouchedFor asks the IFA to confirm that the reviewer is a genuine client. If they do not, the reviewer is asked to send an email or letter to VouchedFor that is from the adviser, which evidences the client relationship.
Advisers can comment on reviews, and respond to any negative feedback that they receive.
A financial adviser who is not tied to any financial services company (such as a bank or insurance company) and is authorised by the Financial Services Authority (FSA). They can advise on financial products to suit your circumstances. All IFAs have to give consumers the choice of paying by fees or commission and have to explain which would best suit the customer in that particular instance. Also, if commission is paid either by the client or the financial service provider recommended by the IFA, the IFA must disclose what that commission is.
Generally thought of as being interchangeable with insurance but isn’t. Assurance is cover for events that WILL happen but at an unspecified point in the future (such as retirement and death) and insurance covers events that MAY happen (such as fire, theft and accidents). Therefore you buy life assurance (you will die, but don’t know when) and car insurance (you may have an accident). Assurance policies are for a fixed term, with a fixed payout, and unlike life insurance have an investment aspect: as a life assurance policy increases in value, the bonuses attached to it build up. If you die during the fixed term, the policy pays out the sum assured. However, if you survive to the end of the policy, you then get the annual bonuses plus a terminal bonus.