Financial planners operate according to different models, which influence the range of investments on which they can provide advice. Before you try to understand these models, you need to understand something about the investments that are available.

A life assurance company can offer you a policy where you can choose the underlying unit trust funds. This policy could be an investment policy or a retirement annuity fund. You will typically commit to a monthly contribution for a fixed term.

A linked-investment services provider can offer you unit trust funds hosted on an investment platform. Most investment platforms are what are known as “open architecture”, which means they are not restricted to the funds of the company that provides the investment platform, but can also offer the funds of other companies.

For example, the Allan Gray investment platform enables you to invest not only in Allan Gray funds but also in funds from 15 other companies.

When it comes to advisers, the typical models are:

* Tied agents, who work for a particular financial services company and sell its policies or investments. For example, Liberty, Sanlam or Old Mutual agents will recommend the policies or investment platforms of their respective companies. These agents are often incentivised to meet targets defined as the number of policies they sell, or the amount of money (assets under management) that they place on an investment platform.

Some tied agents work in “franchises”, which means they operate their own advisory practices as a separate legal entities. But they are registered under the financial services provider licence of a larger financial company, typically a life assurer.

* Independent advisers who offer their own funds. Some independent financial advisers, who are registered on their own financial services provider licence, offer their own unit trust funds of funds. These funds are also known as broker funds and they operate under the collective investment scheme licence of a unit trust fund company.

The advisers typically set up three to five funds, to which they match your investment needs and risk tolerance. The funds are typically multi-asset funds that invest in other, better-known unit trust funds in different proportions, depending on whether the fund is conservative or more aggressive.

These advisers can earn an advice fee, as well as an investment or asset management fee from the fund of funds. In addition, you will pay the fees on the underlying unit trust funds. As a result, the fees on broker funds can be very high.

* Independent advisers who recommend one investment platform. Some independent advisers, typically the smaller ones, have their own businesses and can offer you life and disability cover from a host of financial services companies, but they will choose only one investment platform with a range of underlying funds and advise you to place your investments on that platform only.

* Independent who can recommend a number of platforms. Larger independent financial advisory firms will choose a few investment platforms to offer to their clients, and they will recommend the platform that suits a client’s needs.

The Financial Planning Institute’s David Kop says that, typically, advisers who recommend a number of investment platforms will not offer you access to more than three or four of them, because a platform reduces the fees on the individual unit trust funds if the adviser places a large amount of his or her clients’ money on that platform.

Fundhouse’s Rob MacDonald says an adviser who has done a due diligence and chosen to offer a single investment platform may be more independent than one who has a contract to place a certain percentage of business on a particular platform.

Kop says before you engage a financial adviser you should ask him or her to explain the due diligence he or she performed on the investment policy or platform and why he or she is recommending it.

Some advisory practices sit within larger businesses that have investment platforms – for example, Citadel, Old Mutual Wealth and PSG.

Kop says if advisers in these practices recommend a platform within the business or its wider group of businesses, the adviser should still be able to justify to you why he or she is recommending that platform.

In terms of the Financial Advisory and Intermediary Services Act, an adviser must tell you how much he or she earns from a particular product provider, including an investment platform.

You should also ask whether the adviser has contracts to place investments on other platforms or directly with certain asset managers and whether he or she will advise you on any of your existing investments that are not on the platforms they recommend.