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You are here: Home / Financial advisers / Financial advisers with many confusing titles

Financial advisers with many confusing titles

15, April 2014 by Wilfred Ling Leave a Comment

Many consumers are confused with the numerous and confusing titles financial advisers have. The good news is that you are not alone. The bad news is there is no way to differentiate between the good and the bad.

Currently, almost all representatives are actually salespersons in terms of job function.  That is why consumers are not willing to pay for financial advice and in fact they should not be doing so. The Council for Estate Agents wisely selected the usage of the word ‘salespersons’ to mean the individual property agents. The financial industry will do well by regulating terminology properly.

Despite the majority of the financial advisers acting as salespersons, the industry uses many different titles to confuse the consumer. As a result, many consumers are unable to differentiate between those who are doing sales and those who are providing advisory service. To make it worst, the Financial Advisers Act (FAA) uses confusing legal terminologies. Naturally, with such confusion, any consumer would be worried that they could be paying fee to the wrong type of person! The following is a table which I compiled to reflect the current confusing situation:

TerminologyMeaning under the Financial Advisers ActThe natural meaning in the English languageReality
Financial adviserRefers to a company providing services regulated under the FAA.The individual providing financial advice.A salesperson.
Financial advisory FirmNo such terminology.Refers to a company.The firm selling products from many manufacturers.
Financial adviser representativeThe individual representing the financial adviser.Bad English.Consumer cannot understand this term as it is bad English.
AdviserUnregulated termThe person who gives advice.A salesperson.
Senior AdviserUnregulated termAn experienced person who gives advice.A salesperson.
ConsultantUnregulated termA very experienced person who gives advice.A salesperson.
Personal Wealth ConsultantUnregulated termA very experienced person who gives advice.A salesperson.
Financial plannerUnregulated termA person who can do planning.A salesperson.
Appointed RepresentativeThe individual representing the financial adviser.Appointed by who? Bad English.Consumer cannot understand this term.
Life insurance brokerThe firm selling life products from many insurers.The individual who can source life insurance policies from many insurers.No often used by the industry.
Life insurance broker representativeRefers to the individual representing the brokerBad English.Not used in the industry.
Independent Financial AdviserThe firm that does not receive commission for providing financial advice.A freelance individual who does not work for any firm but can provide financial advice.Although the term is regulated, it is not enforced. Almost all FA firm claims to be an ‘independent’ yet all receive commissions (I consider wrap fees as commissions).
Independent Financial Adviser RepresentativeThe individual representing the independent financial adviser.Very bad English.Not used in the industry as the English is too horrific.

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