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FCA warns on ‘whole of market restricted’ advice label

The FCA has questioned firms that are adopting ‘whole of market restricted’ as an advice label, saying it is “best not to go there”.

Speaking at the Personal Finance Society annual conference in Birmingham today, FCA technical specialist Rory Percival said the regulator defined advice as either independent or restricted.

Responding to a question from Money Marketing on the issue, Percival said: “We do not have a label ‘whole of market restricted’ for consumers. We have independent or restricted. That is not to say you cannot say whole of market in the same sentence as restricted. If you for example specialise in pensions you might say we specialise in pensions and hence our advisers are restricted to retirement planning, but within the pensions field we select from the whole of the market. That would be a clear explanation.

“But introducing a third category, we are restricted whole of market, is a client going to understand what that means? You have not explained the nature of your restriction. So it is probably best not to go there.

“Does the market understand the difference between independent and restricted? Very probably not, but that is probably not surprising given it is a new change. Therefore it becomes incumbent on advisers when they are explaining what service they are providing to make that clearer to the client.”

Writing in Money Marketing this week, Sesame chief executive George Higginson said the network would be whole of market for investments and pensions, while being independent for mortgages and protection.

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There are 21 comments at the moment, we would love to hear your opinion too.

  1. You’re either independent, or you’re not – which means you are restricted. Quite simple really. Yes, there are different degrees of restricted advice out there, from not great for consumers to really bad news for consumers, but it’s good to hear the FCA pointing out there is no room for marketing spin if you choose to offer a restricted service.

  2. Stephen Underwood 8th November 2013 at 12:42 pm

    Well said Martin. Looks like some not too insignificant networks will have to go back to the drawing board – again.

  3. Iam going to Steal Julian Stevens comment fom New model Adviser some moments ago. O.F.F.S!!!!!

  4. Yes quite right, lets not blur the boundaries. WE ARE ALL RESTRICTED. Just check your past activity and how often it goes to some favourite providers.

  5. Come on – If the RDR definition of Independent is taken literally then NO ONE is Independent. Those claiming that they are Independent are either cutting corners or simply paying lip service to keep the FCA happy. Whole of market is what most people want and restricted when it means specialist also makes sense but Independent has now become made meaningless by the FSA/FCA.

  6. Roy

    We really do need some clear English: “We are restricted whole of market, is a client going to understand what that means? ….So it is probably best not to go there …Does the market understand the difference between independent and restricted? Very probably not, but that is probably not surprising given it is a new change.

    This is an example of reaction rather than prescription on the part of the FCA. Independent advice or rather proving it is a regulatory “Russell’s teapot”, and perhaps designed as such. This philosophic burden of proof should lie upon a regulator rather than shifting the burden of proof to the adviser.

    Russell wrote that if he claims that a teapot orbits the Sun somewhere in space between the Earth and Mars, it is nonsensical for him to expect others to believe him on the grounds that they cannot prove him wrong. Independence is a meaningless concept and impossible to prove when that burden is on the adviser. Lets have a clear cut definition from the FCA as to what is and what is not independence rather than expecting advisers to disprove a negative i.e. you did not give independent advise – a farcical concept.

  7. As a consumer, supposedly at the heart of this self-absorbed jargon and procedural orgy, I am not writing a cheque out for £500 for two hours consulting time only to have an adviser use half of it up saying “we specialise in pensions and hence our advisers are restricted to retirement planning, but within the pensions field we select from the whole of the market.”

    And frankly I haven’t the remotest clue what the hell it all means. Nor for that matter “independent” or “restricted”

  8. How about “Whole Of Regulated Market” – or just abbreviate it to WORM.

    I do hope the OED are reading – I want credit for that!!

  9. Unfortunately for Money Marketing, there reporting has been too good and balanced compared to that of NMA ho i made the mistake of reading first and responding based on “soundbites”. So far MM have had 5 comments and NMA 40 due to quoting Rory Percival selectively. I really MUST stop reading NMA and focus on MM who actually report fairly.

  10. Oliver Hardy would have waxed lyrical about another fine mess that the regulator has got itself in.

    I do find it bizarre that there is even one adviser who would try to defend the total nonsense that these descriptives bring.

    Imagine walking into a clinic and seeing a list of the following medical specialists who you can approach.

    a) Mr Jones Consultant Cardiologist

    b) Mrs Patel Consultant Paediatrician

    c) Sir Richard Hogweed Consultant Gastroenterologist

    d) Fred Filth independent medical adviser

    Fred will look at all of your medical concerns and have a crack at solving them. Some he might even do a good job on.

    Would you consult Fred or elect to consult a specialist who, naturally, is restricted inasmuch as he only advises in certain areas.

    Yes, it’s a nonsense and the FSA/FCA has created this nonsense and even has the temerity to attempt a defence.

  11. For crying out loud !!! AAaaarrrrrHHhhhhhh !!!!

    We don’t know what it means, the stupid FSA/FCA don’t know what it all means? WTF !!!

    This whole RDR fiasco ! sorry this whole “2 billion” RDR fiasco needs to be shit canned, we told them the TSC told them, we are nearly a year in and where has it got us really ?

    What positive things have happened over the past year ? answers on the back of a stamp would be more than enough space to put that down !!!!

    And as for Percy, well here’s one for you, my clients and probably most of everyone else’s clients do NOT give, a toss whether their pension/ISA/Unit trust etc etc etc is picked from whole of market, the sunday market, Newmarket or the bloody moon !!! just that it does the bloody job its supposed to do


  12. The ‘holier than thou’ claptrap about independence being the only good way and restricted being the only bad way is quite nauseating.

    Let’s look back at the last few fines handed out by the FCA/FSA for unsuitable and advice. What do we find? IFAs ripping off clients left, right and centre and no restricted advisers in sight. Being an IFA doesn’t make you a saint and there are plenty of restricted advisers out there providing a much better service to their clients than many IFAs.

    Alan hit the nail on the head with the medical analogy. There’s a legal one too. Go to a high street solicitor who can deal with anything and everything or go to a specialist who only deals with your problem? Likewise accountants, etc…

    Some IFAs have their nose stuck so far up with their snooty view of restricted it’s a wonder they haven’t gone all the way round and ended up with it up their…

  13. Alan – I am not defending the descriptives. I said they were crap pre RDR, but we are here NOW and need a period of stabilization, even if in 5 years we change again (hopefully for the better and not back to the way it was or is)

  14. @Martin B – Don’t fall of your chair, but I agree with your first post.

  15. @ Philip Castle…. I thought youi were going to get your Garbriel done!!!!!

  16. @ Phillip Castle

    Not being funny Phil but you need to stop agreeing with everybody and get on with your Gabriel return – no offence !.

    By the way, I agree with DH, Grey Area and Alan Lakey

  17. @Philip Castle

    I’m in the car with my seatbelt on, so no chance of falling off my chair!

  18. @Marty – Bigger – Knew I’d forgotten something.

  19. @Martin _ I fall off my surf Kayak with my thigh straps on all the time in the winter (getting a bit cold now will soon need to be fully encased in rubber!!). I really do need to leave for the pub now, stuff the Gabriel report it can wait til tomorrow.

  20. I think there is a danger here that some are implying that the FSA are saying you can’t be a specialist. You can.

    So if you want to Restrict your advice and marketing to be the Specialist in advising on Bonds, then go ahead. Just don’t use the Independent word

    Except I suggest that what you really mean is that you want to specialise in a certain market. Which is logical. And that has nothing to do with the FSA unless you decide to Restrict the range of products you will choose from whilst ‘holding out’ as an ‘Independent’ adviser.

    There is nothing wrong with being Restricted. It’s not a moral choice, it’s a business choice. You say your clients don’t care anyway. So fine. Be Restricted.

    But don’t pretend this is ‘forced’ on you by the FCA and those of us who have looked at the same facts and decided to be Independent are stupid, blinkered etc. We have made the same commercial choices as you have. Simple as that.

    And no. Being Independent is not impossible / you have to sell every product / list every product to every client etc. Those myths got killed ages ago. It’s all about process and mindset

  21. @Phil Billingham | 11 November 2013 2:49 pm – Agreed, but I am getting fed up with those who have chosen to be restricted blaming everyone else for their own decisions.

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