RDR: FSA confirms restriction on independent tag
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Firms that offer a single product investing in a number of underlying investments will not be able to call themselves independent.
The FSA’s policy statement, published today, says as the rules apply to the personal recommendation of a particular retail investment product, a single product that invests in a number of underlying investments would not of itself meet the requirements for independent advice.
FSA head of investment policy Peter Smith says: “If we are requiring firms to look across the whole of the market then it does not automatically follow that a structure of the sort that is described meets that test.
“The fact that the product people are being encouraged to invest in, invests in a range of underlying things, is not the same as saying the firm themselves has looked across the whole of the market for individual consumers.”
Smith says in some circumstances it might make sense for an adviser not to look at certain products, such as products that do not give access to the Financial Services Compensation Scheme.
But he adds: “The presumption is that independent advisers will look across the whole retail investment space with the broader definition that we’ve set out and will then consider what is appropriate for the individual consumer that is sat in front of them at that particular point in time.”
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Readers' comments (3)
Anonymous | 26 Mar 2010 2:35 pm
Crackers if you ask me it is the investment that involves the risk andprovides the returns not the contract. The contract is just a tax saving vehicle and it does not matter who provides it.
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D W | 26 Mar 2010 4:14 pm
Of course it matters who provides it, as different providers offer different features, services, financial protection, administration services, costs, functionality, fund ranges, trading capabilities etc, etc....if you only use one....you are asking for trouble and, in my opinion (fo rwhat its worth) being lazy by not researching the whole of market.
Furthermore, research must be ongoing, as providers change (for better, or worse) so you need to be in tune with the market place, or you may get caught out!
Good luck!
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Anonymous | 29 Mar 2010 9:06 am
There are definite advantages of not being independent!
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