If you were choosing a solicitor to act in a property transaction, you would expect them to act solely in your interests. You would not expect them to recommend a particular mortgage lender because they receive a payment from that lender for each referral. Financial advice should work the same way — but historically, much of it has not.
The financial services industry has a long history of remuneration structures that create conflicts between what is best for the adviser and what is best for the client. The regulatory response — the Retail Distribution Review in the UK (2013), MiFID II across the EU (2018) — went a long way toward addressing this. But the distinction between genuinely independent advice and restricted or product-led services remains important, and is not always easy to spot.
What does "independent" mean legally?
Under MiFID II (which applies across the EU and equivalent UK rules post-Brexit), investment advisers must clearly state whether they provide independent or restricted advice.
Independent advice has a specific legal meaning:
- The adviser must assess a comprehensive and fair range of products and providers across the whole market — not limited to a panel, a preferred list, or a specific product type
- The adviser must not accept and must not retain any fees, commissions or non-monetary benefits from product manufacturers or third parties. Any such inducements must be returned to the client.
- The advice must be based solely on the client's best interests
Restricted advice means anything else — advice limited to a subset of providers, a product category, a product panel, or the firm's own products. A bank that advises on its own insurance products and deposits is giving restricted advice. A wealth manager that can recommend any product but only from a panel of preferred providers is restricted. A tied agent who represents a single insurance company exclusively is restricted.
Both can call themselves "advisers." Both can be competent and professional. The difference lies in whether structural conflicts have been removed from the process.
The problem with commission
Before the Retail Distribution Review, most UK financial advice was delivered on a commission basis: the adviser recommended a product, the product provider paid the adviser a percentage of the investment — sometimes upfront, sometimes spread over years as "trail commission." The client often did not know how much was being paid or to whom.
The problem is structural. An adviser who earns 3% upfront on Product A and 0.5% on Product B has a financial incentive to recommend Product A, regardless of suitability. This is not necessarily dishonest — most advisers believed their recommendations were in the client's interest — but it creates a bias that is difficult to eliminate even with good intentions.
Post-RDR, commission is banned for investment advice in the UK. Advisers must charge fees agreed explicitly with the client. In the EU, MiFID II goes further: independent advisers must return any commission received to clients.
However, commission remains legal in:
- General insurance (home, car, travel insurance)
- Protection products in some jurisdictions
- Non-EU/UK markets, including much of the Middle East, Southeast Asia and parts of Africa
Expats dealing with advisers outside the UK/EU regulatory perimeter should ask explicitly how the adviser is remunerated. A willingness to answer clearly and transparently is itself a positive indicator.
Why whole-of-market access matters
Beyond the commission question, independence requires access to the whole market. This matters because:
Products differ substantially in quality and cost. Two unit-linked investment bonds that appear similar may charge 1.5% or 0.5% per year. Over 20 years on a £500,000 portfolio, that 1% difference in charges compounds to a difference in outcome of approximately £150,000–£200,000. An adviser restricted to a panel may never consider the lower-cost option.
The best option may not be in the panel. New products, specialist offerings and niche solutions — the most appropriate option for a specific client — may not be available if the adviser is limited to a predetermined list.
Offshore products in particular require market-wide comparison. Offshore bonds, international pensions, structured products and QROPS vary enormously in terms of charges, flexibility, regulatory protections and suitability. A restricted adviser who can only recommend their employer's or parent company's products cannot be objective about whether a competitor product would be better.
Conflicts of interest beyond commission
Commission is the most visible conflict, but not the only one:
Proprietary products: Some wealth management firms earn significantly higher margins on their own funds than on third-party funds. An adviser at such a firm may be incentivised (implicitly or explicitly) to recommend the in-house range.
Volume bonuses: Some platforms and product providers offer advisers enhanced terms if they place a certain volume of business. These incentives are required to be disclosed under MiFID II, but disclosure is not the same as elimination.
Cross-selling: An adviser remunerated for cross-selling banking products, insurance, and mortgages alongside investments may prioritise product coverage over depth of advice.
Corporate relationships: A firm that owns stakes in product providers, or that has significant commercial relationships, has a structural interest in the success of those providers.
None of these conflicts necessarily produce bad advice — many restricted advisers are highly competent and professional. But they do mean that the structural incentive is not fully aligned with the client's interests, and the client cannot verify that the recommendation given was the one that would have been made absent the conflict.
What questions to ask
Before engaging any financial adviser, internationally mobile or domestic, ask:
- Are you independent or restricted? (If restricted, what is the scope of the restriction?)
- How are you remunerated? (Fee, AUM percentage, commission, or a combination?)
- Do you receive any payments from product providers? (If yes, how much, and do you return them to clients?)
- Who is the registered entity I am dealing with, and what regulator authorises it?
- Can I see a sample client fees disclosure document?
- What is the total cost of your recommended solution, including all product charges?
A competent, independent adviser will answer all of these questions clearly and in writing.
How Global Investments operates
We are an independent firm. We provide investment advice across the full market of products and providers, based solely on what is appropriate for each client's individual circumstances. We do not accept commission from product providers — our remuneration comes from the fees we agree with our clients. Our regulated services are provided through our authorised entities (NFS Insurance Advisors, Agents and Sub Agents Ltd — ICCS Licence 5689; and Financial Services Network Ltd — Mauritius FSC C116016070), and where UK-regulated advice is required it is arranged through an FCA-authorised specialist we work with.
We believe genuine independence is not a marketing claim — it is a structural commitment that should be verifiable by the client at every stage of the relationship.
Contact us to arrange an initial consultation.
Regulatory requirements vary by country. Always verify an adviser's regulatory status and full remuneration arrangements before engaging. This article reflects UK and EU regulatory frameworks as of June 2026.
This article is for general information only and does not constitute financial, legal or tax advice. Rules, prices and regulations change; verify current requirements with a qualified adviser before acting.