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Leader: Has independent status become less important?

Natalie Holt, journalist with Money Marketing Photo by Michael Walter/Troika

Distribution is changing – that much is clear. In any given week, we hear word of the latest advice firm to be snapped up, with collective running tallies of assets under advice, number of clients, and number of advisers acquired (that tends to be the order of priority).

The deals announced over recent weeks involving Almary Green and Baigrie Davies, and the subsequent staunch defences in Money Marketing over why the deals were done, are headline- grabbing because of the nature of the firms being bought. These are not two-bit operations but well-established, professional advice firms; “pukka businesses” as one commentator described them.

Which is all the more reason why their move to a restricted model under Standard Life-owned advice arm 1825 is so surprising.

Although it feels like a lifetime ago now, in reality it was not all that long ago when independent status was championed above all else. It was 2012 when then Aviva RDR implementation manager Ross Anderson set the cat among the pigeons by claiming over 75 per cent of the market would be restricted by 2015. At the time, that seemed like a hellish version of the future.

Those forecasts, made perhaps more to provoke than enlighten, did not come to pass. Yet the story told by the latest forecasts from EY, which have not been published before now, paint a similarly gloomy picture for IFAs.

EY, which famously got a kicking for predicting an RDR-inspired downturn in adviser numbers, believes restricted will count for at least half the market within the next five years.

A disclaimer – it has been difficult for Money Marketing to verify how many advisers are IFAs and how many are restricted currently. Apparently the FCA does not collect this data, and Apfa and the Personal Finance Society do not split their member data this way. Does the very fact this data is not collected suggest independence is not considered as important as it once was?

When deciding on the merits of one advice model over another, or choosing who to align your firm with in future, advisers are well versed in separating the vested interests espousing the cost of independence from the facts.

But speaking to advisers, it is reassuring that despite the forecasts pointing in one direction, there is a core of advisers for whom independence is paramount. Among them, there may be advisers who do not meet the regulatory definition, but remain independent of thought and are continually pushing for good client outcomes whatever the label.

Natalie Holt is editor of Money Marketing



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Baigrie Davies co-founder Tom Baigrie says “the world has moved on” from the independent versus restricted advice debate after completing a deal that sees it become the London office of Standard Life-owned 1825. Baigrie will leave the business following the expected completion of the deal in Q3 and says he has no concerns about the […]


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It is now common knowledge I have signed an agreement that should lead to the acquisition of my firm by Standard Life’s financial planning arm 1825 . Real change is needed in our sector if we are to continue to meet the growing need for affordable advice. Over the past year I have taken a long, hard look […]

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There are 6 comments at the moment, we would love to hear your opinion too.

  1. Independence is still a nice moniker to wear but, when all is said and done, if complying with the FSA’s totally OTT and not really necessary re-definition of it is so onerous as to make life a misery and push up costs to unreasonable levels, the only practical alternative is to go restricted (in selected areas of business). Very few clients care anyway, as evidenced by the great success of SJP.

  2. This isn’t a question to be addressed to your readers. Speak to clients – particularly those who might have had experience of both independent advice and the others. In all my time in the business I never came across any client that didn’t value (and prefer) independent advice. Indeed I had no shortage of those who had come to me from tied and latterly restricted advisers precisely because I was independent.

    Furthermore all my clients came from referrals, not only from existing clients, but from solicitors, accountants, a surveyor and even a stockbroker – all precisely because I was independent (and charged fees).

  3. It is gloomy news that the number of independent financial advisers continues to fall – particularly for prospective customers. A prospective customer with the means to pay for advice would be making a serious mistake to choose a restricted, rather than an independent, adviser.

  4. @Harry Katz
    In my experience it’s important to those clients that have their attention drawn to it. Otherwise it rarely arose. Prior to the RDR change in definition it may even have meant something. But now you would have trouble inserting a piece of tissue paper between some IFAs and restricted whole of market advisers. Indeed, I suspect in some cases the latter are more ‘independent’ than the former in the sense most clients would understand.

    “What’s in a name? that which we call a rose by any other name would smell as sweet.”

  5. Independence still carries significant weight, especially with clients and more so with HNW clients who have an aversion to product sales people. I think the blurring of the lines with this “whole of market”, “restricted” nonsense has worked against IFAs as the waters are muddied, all sorts of outlandish claims can be flung about by Restricted advisers, so it is now less of a leap to move from IFA to restricted.

    On the recent sales to 1825, not being able to make money on some of the figures quoted here, of £400m AUM, suggests it is more to do with an inefficient IFA business model than the impact of FCSC levies.

  6. The ‘Independent Financial Adviser’ name is only successful because IFA’s promoted the independent moniker so hard and successfully. It seems completely wrong that a regulator should then be able to redefine a label that was not theirs in the first place.

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