Tied v Independent
Personal finance can seem a daunting subject. It seems almost everyone is offering insurance and financial products. The first important warning is that if you buy direct, then you are responsible for the suitability of the product or service. Some institutions and companies have tied agents.
Do you know the difference between a tied agent, a multi-tied agent and an independent financial adviser or independent insurance broker?
As you might gather from the name, a tied agent is normally employed directly by a bank or insurance company. They may also be self-employed (even with separate trading names), but still be ‘tied’ to one company.
Being a tied agent means the adviser can only advise or sell you products offered by the company that employs them. This can be limiting in that even if there is an alternative, better product the agent cannot tell you about it. Further, they cannot be held responsible for not providing something the company they represent does not offer.
Be aware that the agent's income will come from the provider. In respect of insurance, a tied agent will not be independent in the event of a claim.
Do you know the difference between a tied agent, a multi-tied agent and an independent financial adviser or independent insurance broker?
As you might gather from the name, a tied agent is normally employed directly by a bank or insurance company. They may also be self-employed (even with separate trading names), but still be ‘tied’ to one company.
Being a tied agent means the adviser can only advise or sell you products offered by the company that employs them. This can be limiting in that even if there is an alternative, better product the agent cannot tell you about it. Further, they cannot be held responsible for not providing something the company they represent does not offer.
Be aware that the agent's income will come from the provider. In respect of insurance, a tied agent will not be independent in the event of a claim.