The bar has not been set too high for independent financial advice, claims FSA head of investment policy Peter Smith.
The regulator published a series of RDR papers this week on independent and restricted advice, distributor-influenced funds and the treatment of legacy assets.
They reiterate that a firm claiming to offer independent advice must provide unbiased and unrestricted advice based on a comprehensive and fair analysis of the relevant market.
Independent advisers must consider a broad range of retail investment products, including structured products and unregulated collective investment schemes.
Asked by Money Marketing if the bar for independence has been set too high, Smith (pictured) said: “I do not think the bar is that high. There is a lot of pragmatism built into the requirements.”
Smith argues the independence requirements after the RDR are there to ensure advisers think about how best to service current and future clients.
Asked how many advisers are likely to stay independent after the RDR, Smith says: “For a large proportion of advisers, they see benefit in the term independent adviser, so they are starting down the route of wanting to be independent. Inevitably, there will be some firms for one reason or another that decide they wish to offer a restricted advice service. We do not know the exact numbers of that yet, that will become clearer as this year goes on.”
Facts & Figures Financial Planners managing director Simon Webster says: “The bar for independence has not moved much. An IFA, by definition, is supposed to offer independent, whole of market advice.”