Category: Distribution · Reviewed by Tim Roche, Director · PI & Commercial · Last reviewed 2026-06-05
An Independent Financial Adviser (IFA) is a regulated financial adviser authorised by the Financial Conduct Authority to provide investment, pension and protection advice on the basis of a comprehensive and unbiased analysis of the relevant market, without restriction by provider, product type, or product characteristics. The status of independence is regulated principally under COBS 6.2A of the FCA Handbook following the Retail Distribution Review.
Category: Distribution and intermediation Also known as: IFA, Independent Financial Adviser, Financial adviser Regulatory basis: FCA Handbook COBS 6.2A; SM&CR; Retail Distribution Review (RDR), in force 31 December 2012 Related concepts: Restricted advice, Independent intermediary, Independent advice insurance
The Independent Financial Adviser title is a regulated term in the UK financial services market. A firm may not describe itself as offering independent advice unless its service satisfies the requirements of COBS 6.2A.5R: the adviser must base its personal recommendations on a comprehensive and fair analysis of the relevant market, including a sufficient range of relevant products, and the analysis must be unbiased and unrestricted.
The IFA status was redefined by the Retail Distribution Review (FCA / FSA, Policy Statement PS10/6 and related Policy Statements), in force from 31 December 2012. The RDR replaced commission-based remuneration on most retail investment business with adviser-charging, introduced enhanced qualifications and ongoing competency requirements (RDR Level 4 qualification), and tightened the definition of independence. COBS 6.2A.5R sets out the independence test; COBS 6.2A.6R sets out the alternative restricted advice status. The SM&CR brings the responsible advisers within the Certification Regime.
A modern IFA conducts a full fact-find of the client’s circumstances, objectives and risk appetite; identifies the universe of relevant products including pensions (defined contribution and defined benefit), ISAs and other tax wrappers, protection insurance (term assurance, critical illness, income protection), and investment products; analyses the comprehensive market; and provides a personal recommendation supported by a written suitability report.
Remuneration is by adviser charging — typically a percentage of assets under advice (e.g., 1% initial, 0.5-1% ongoing) or a fixed fee. Commission on retail investment business is prohibited (with limited exceptions for legacy protection-only business).
A “restricted adviser” gives advice that is restricted by product type, provider, or other characteristic, and must disclose the restriction prominently to the client. An “execution-only” broker provides no advice but transacts on the client’s instruction. A “robo-adviser” provides automated personal recommendations using algorithmic analysis and may be either independent or restricted depending on the configuration.
A 55-year-old client consulting an IFA about retirement options would expect comprehensive analysis covering pension drawdown, annuity purchase, defined benefit transfer (subject to FCA permission requirements), ISA structuring, and protection cover, with a written suitability report supporting any personal recommendation.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-05. Next review: 2026-12-05.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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