Graeme Robertson: Let's be clear about transparency IF YOU use a financial adviser, you need to be aware of new rules which came into force for them on 31 December 2012. These rules were pushed through by the Financial Services Authority (FSA), the industry regulator, and are designed to improve the quality of financial advice. The qualification benchmark for advisers has been raised and they must now have attained the new higher level to be authorised to give financial advice. This should give people more confidence that their adviser is properly qualified. Also, commission payments for selling investments and pensions have been abolished. This means that advisers should no longer have a financial incentive to sell you one product over another. It also means that there is far greater transparency over how much you pay an adviser, how those charges are taken and what services you will get in return. However, while this is all good news, there are some potential pitfalls which people should be aware of. To start with, the new rules don't apply to execution-only firms. Many of these firms provide financial guidance and information, but don't give specific financial advice. They can still take commission on new investment and pension business and they aren't obliged to provide any greater transparency over the charges they take. Execution-only brokers are used by many investors and they certainly have a role to play for those who are willing to make their own financial and investment decisions. However, these people should be aware that execution-only firms get paid different levels of commission depending on which funds or products they sell and this could influence those which they promote or recommend. The new adviser rules have also created a new category of adviser called a Restricted Adviser. These advisers either cannot give advice in all areas or they will only sell their own products or products from a restricted list. There are four main reasons why an adviser may have chosen to offer restricted rather than independent advice: These are: 1, They don't have the capabilities to offer independent advice; 2, They don't want to offer comprehensive financial planning solutions; 3, They will make more money by selling their own products; 4, They are incentivised, either financially or otherwise, by providers to sell their products. It is likely that those advisers who have chosen to be restricted have done so because it is in their best interests, rather than in the best interests of their clients. This is evidenced by those selling only their own funds. These funds often have much higher charges than those available elsewhere and so wouldn't be recommended by an Independent Financial Adviser. Those taking financial advice should find out if their adviser is independent or restricted; all advisers will be one or the other. If they are independent, you should be on safe ground. If they are restricted, find out why and what impact it might have on the service you receive. Graeme Robertson is a chartered financial planner at AWD Chase de Vere