View more on these topics

Don’t be scared of restricted advice, says Goddard

Personal Finance Society chief executive Fay Goddard has backed restricted advice, saying advisers can still offer independent advice if they are offering a limited range of products.

Speaking on board the Aurora at the PIMS conference last week, Goddard said advisers should not be put off by the term res-tricted. She said: “I know at the moment the vast majority of IFAs want to stay independent but if you cannot meet that very high whole of market standard that the FSA has set, you can still be independent with your advice and your services.

“The duty of care and loyalty is still to the client. It will still be independent advice but it may be from a restricted range of products and services, so I do not think we should be frightened of this word restricted.”

Chartered IFA firm LIFT-Financial joint chief executive Joel Adams said: “There is a confusion in terms. It is not a case of choosing between restricted and independence because you will still be able to be a restricted adviser and independent.

“Restricted does not necessarily mean being tied to individual product providers, it means your investment proposition is as narrow as most of our propositions are today.”

Honister Capital has committed to remaining independent. Strategy, product and commercial development director Alan Easter said although moving to a restricted model can save on research costs, independence is more important to advisers and clients.

Institute of Financial Planning chief executive Nick Cann expressed concerns about the different advice labels in use, saying it is difficult for clients to differentiate between independent, restricted, simplified and basic advice.


News and expert analysis straight to your inbox

Sign up


There are 11 comments at the moment, we would love to hear your opinion too.

  1. Douglas Baillie 27th May 2011 at 9:25 am

    There should be no room for more confusion in the consumers minds between independent and restricted advice. This needs to be much clearer and the FSA should take the opportunity afforded by RDR to bring in complete clarity.
    Know your client is a well known mantra, and that must apply to all advisers. But how can a restricted adviser possibly advise on a new client’s existing policies and particularly pension plans if he is not fully independent? This aspect alone can easily lead to mis-direction and inappropriate advice.

  2. Fay Goddard says “The duty of care and loyalty is still to the client” — so is this Multi-tied Best advice from a previous life ???!!!!!!!

  3. My sense checking suggests be afraid very afraid post 31.12.12.

  4. Incompetent Regulators Awards Team 27th May 2011 at 9:48 am

    As is financial advisers need advice from Goddard. What has she done for the industry apart from create a non job for many years

  5. Fay is a regulatory barometer 27th May 2011 at 10:27 am

    Fay is a regulatory barometer. If Fay says turn right then turn left! Fay Goaddard and the PFS/CII examination machine has promoted level 4 and anti grandfathering. Any IFA that pays fees to this organisation should reflect on this and reconsider.

  6. Fay represents PFS not consumers 27th May 2011 at 10:29 am

    The future for PFSin tied multie tied restricted advice – Fay is representing PFS and not IFA’s or consumers!

  7. Confusion grows. Clients have enough problems sorting out tied, multi tied and independent.
    Ms Goddard’s contribution was a statement of the exceedinly obvious. Heaven alone knows how someone so well paid comes up with such pearls of wisdom.

  8. Who is the most to blame?

    The nonentity herself,
    the bunch of con men that employ her,
    or the mugs that fund her with their fees.

  9. Green Eyed Monster 27th May 2011 at 12:31 pm

    to Anonymous: Fay’s contribution may indeed have been a statement of the obvious, but surprise surprise , nearly every one of the comments above did not see it!
    Firstly, Alan Easter states “moving to a restricted model can save on research costs, independence is more important to advisers and clients”. Did he not spot that independence is not the opposite of restricted? Independence is the opposite of tied! Whole of market is the opposite of restricted. As Fay says you can be independent AND restricted.

    Douglas asks: “how can a restricted adviser possibly advise on a new client’s existing policies and particularly pension plans if he is not fully independent?” Of couse he /she can, providing the his restriction includes policies and pensions.

    Come on guys get a grip!.

  10. Julian Stevens 27th May 2011 at 8:26 pm

    The only class of adviser that should be forced to call themselves restricted are those tied to a limited selection of providers and who don’t offer advice on whatever products the client may have already with any other providers.

    I advised a client on vesting his two PP’s a few months back. His first port of call had been his bank, and not only had the “adviser” failed to admit that he couldn’t (or couldn’t be bothered to) advise on the client’s existing policies, but he’d taken away most of the paperwork and never returned it. A classic case of failure to disclose true status or what?

    Still, never mind, the RDR will sort everything out and we’ll all live happily ever after.

  11. I haven’t decided what my offering will be post 31.12.12,
    but I agree with GEM above.

    Independant is the opposite of tied,

    Whole of market is the opposite of restricted

    That is how I read the RDR papers.

    The problem is that the Keyfacts will not make that clear in their current intended format, it will be for someone who is Independant, but is providing a restricted service (perhaps just to a segment of their clients), to issue a Keyfacts stating restricted and verbally explain that restriction in a way that is fair and makes sense to the client.

    ALL tied advisers will be restricted, but and Independant advisery firm, could be offerring different services at different times to different people. If you don’t have G60 equivalent and your firm does not have authority to undertake occupational pension transfers, or anotehr specialist area, will that mean you will have to say your authorisation means your advice is restricted?

    Large bits of the RDR remain a good idea, which still has massive problems with teh small print and detail.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm