Finding advice that suits you

17 February 2021
3 min read

Richard Lishman explains the different types of financial advisers.

A dental practice is more than just a business – it is a complex balance between providing exceptional care for patients, branching out into innovative new avenues and consistently keeping on top of all the necessary financial aspects that running a successful service entails.

Basically, it can be very hard work, especially during a time when there are big shifts in the economy occurring and nothing seems certain.

So, where do you turn for financial advice during these times? There are many different types of financial adviser, so it’s important to know the differences before you seek their help.

Tied financial advisers
A tied financial adviser is someone who works directly for a service provider. For example, they may be a financial adviser at a bank or for an insurance company, and as such they are bound to offer the services available from these providers. They may also work with a firm that has a partnership with a certain provider, which means that, although they aren’t in-house, they are still specialists at providing guidance relating to a certain set of products and policies.

There are benefits to using the services of these individuals – for example, a tied financial adviser at the bank where you have your mortgage will inevitably have a full insight into this policy and may be able to give you more specific advice related to certain aspects. However, you also have to take into consideration that a tied financial adviser is likely only going to have a limited amount of policies and services available, and this can be restrictive when you want to explore new avenues, or even make certain savings.

Multi-tied financial advisers
Much like tied financial advisers, multi-tied financial advisers work for specific providers, though in this case they work with a selection so that they can often cover different industries. For example, a multi-tied financial adviser may work with both a bank and a medical insurance company, and this means that they can offer you a more comprehensive range of policies and services.

However, much like with a tied financial adviser, there is no guarantee that the deals you are getting are the most beneficial because they are limited to certain providers. Plus, a multi-tied financial adviser may still not have ties to service providers who offer what you need, meaning that you’ll likely have to work with multiple individuals in these roles should you want to cover all bases.

Whole-of-market advisers
Whole-of-market advisers are a bit less specific than the previous two types, and are experts in multiple markets. This means that they can often hunt down the most beneficial deal for you depending on what you’re looking for, especially as they will have knowledge and contacts across various fields.

It is worth remembering, however, that these advisers earn commission from various service providers once they make a sale, and this means that they may be inclined to still lead you in a certain direction. Ultimately, if commission rates are higher from one service provider when compared to another, it would make sense for these individuals to steer you towards these choices, which may, at the end of the day, not be the best for you or your practice.

Independent financial advisers
Unlike the previous types of financial adviser, independent financial advisers are not bound or restricted by any loyalty to any service providers. This acts to your benefit in a number of ways.

For example, say you wanted to sell your practice or look for a new insurance policy – independent financial advisers can scour the whole market for you to find the policies and opportunities that will benefit you best, especially if they have an intimate knowledge of the dental field.

The award-winning team of independent financial advisers at money4dentists are an excellent choice for dental professionals looking to reach certain finance goals, sell their practice, explore different insurance options and more. Voted the “Best Dental Industry Financial Advisers 2020” at the SME Finance Awards, the team are always on hand to offer advice that is bespoke to you and your practice, as well as any personal guidance you need when it comes to home insurance, buying stocks and more.

The advice you receive matters
In the end, you need to think about the source of the advice you receive and who any decisions will benefit. There is no reason not to work with tied financial advisers if they are affiliated with the services that you think are the best option. However, by seeking independent advice you have access to more opportunities, and by finding an independent financial adviser who understands your profession, you can guarantee they will do all in their power to aid you in reaching your goals.