At the time (1988) the UK government was introducing the polarisation regime which forced advisers to either be tied to a single insurer or product provider or to be an independent practitioner.
The term is commonly used in the United Kingdom where IFAs are regulated by the Financial Conduct Authority (FCA) and must meet strict qualification and competence requirements.
[1] Individuals and businesses consult IFAs on many matters including investment, retirement planning, insurance, protection and mortgages (or other loans).
IFAs should also be able to demonstrate to the FCA that they review all the suitable products in a market and that they give fair, unbiased and unrestricted advice.
However, some banks, building societies and insurance advisers could switch to offering an ‘information only’ (non-advised) service instead, where fees won’t be apparent.
An increasing number of advisers are now also “Chartered”, which means being qualified to a level 6 standard (equivalent to a first class honours degree.)
The principal firm takes regulatory responsibility for the appointed representative, and must ensure it meets FCA requirements.