A report from the Office of Fair Trading (OFT) due very soon is expected to recommend that only financial advisers who charge fees - as opposed to earning commission - can call themselves "independent". But if you are willing to pay a fee for financial advice there are plenty of real professionals who can help you: many firms of accountants, lawyers and tax consultants give independent financial advice.
Accountants and lawyers operate under stricter regulatory and ethical codes than a financial adviser. The Institute of Chartered Accountants in England and Wales (ICAEW) has 4,500 firms authorised to carry out investment business. It estimates that around 1,000 firms give the same sort of mainstream financial advice as a high-street IFA. Among solicitors, a small number of practising lawyers are also qualified financial advisers, and between 200 and 300 firms offer a full, discretionary investment service to their clients. A larger number of practices employ specialist financial advisers or financial planners to work with clients. These operate under the relevant professional codes of conduct, even if they are not lawyers or accountants themselves.
The rules are stricter than those for IFAs, since the professions are bound to give "best advice". Moreover, the protection for investors is greater than that from IFAs. The Investors Compensation Scheme, which covers IFAs, has an upper limit on claims per client of pounds 48,000. The compensation scheme for solicitors' clients has no upper limit.
The professions usually charge more for financial planning than an IFA, but they argue that they have a clearer picture of their clients' financial circumstances. "Firms give financial advice as part of their overall services," says Chris Boddington, head of investment business at the ICAEW. "Clients will be clients for other purposes, so an accountant can build up a more comprehensive image of your lifestyle."
Many people come into contact with law firms when they have an inheritance or a lump sum from a former spouse or employer. "If people inherit money, they want to know how to invest and how to protect it," explains Peter Raymond, a member of the Law Society Council and a partner at Cripps Harries Hall, a firm of solicitors in Tunbridge Wells. "In most firms that give financial advice, the client is already dealing with a solicitor."
Lawyers may not be the most popular professionals, Mr Raymond concedes, but their clients do trust them. While financial planning services have traditionally appealed to the elderly, lawyers are now seeing increasing interest from younger people who are simply too busy to look after their own finances.
Accountancy firms have gained from shifting employment patterns, as more people run small businesses or work for themselves. The self-employed may use an accountant to draw up the books, handle payroll payments, or deal with VAT. It is then a small step to advise on tax, or pension arrangements. Self-assessment has also prompted more taxpayers to turn to accountants and chartered tax advisers. Tax-saving advice may be the most valuable service these professionals can give.
"Many clients come to us for retirement or pension planning," says Howard Gross, partner in London accountancy firm Gross Klein and Company. "We may also deal with a person on tax advice and accountancy through the year. We can save a lot of time by using information we have built- up, perhaps through handling their tax. Clients have to tell us the truth, otherwise they have to answer to the Inland Revenue."
Unlike IFAs, lawyers and accountants do not depend on selling products for their livelihoods. Solicitors and accountants usually charge a fee for their work and rebate the commission for any products they sell. "It gives us the ability to be more imaginative, and look at the whole investment picture, not just from a commission point of view," says Mr Raymond.
n Contacts: ICAEW (chartered accountants), 0171-920 8100; Law Society (gives the names of three local solicitors' firms offering financial advice), 0870 606 2566; Chartered Institute of Taxation (gives the names of local qualified tax advisers): 0171-235 9381; Cripps Harries Hall, 01892 662233; Gross Klein and Company, 0171-242 2212.