The departments of misinformation within a number of big organisations have been hard at work spreading scare stories about how difficult it will be to remain independent after the RDR and that the magic answer is to become a restricted adviser.
It is no surprise to see that these are the same organisations which forecast a few years ago that depolarisation would lead to the death of the IFA sector. Then it was multi-ties that were going to conquer the world.
The reality is that the IFA sector goes from strength to strength and currently has its biggest market share ever. But despite the enormous success of the IFA sector, it is understandable that the RDR changes have caused uncertainties.
What I find most disturbing is the way that so many big firms, particularly networks and nationals, play on these concerns to promote restricted advice for short-term commercial reasons rather than considering the longer-term benefits of independence for advisers and their clients.
IFAs are not stupid. A glance at restricted advice should be enough for any independent adviser to realise that going restricted is a road to nowhere.
Under the RDR, restricted advisers will be governed by exactly the same rules for qualifications, transparency and remuneration as independent advisers. If an IFA is qualified to diploma level or above, why on earth would he or she want to be shackled to the ball and chain of the restricted advice label?
One of the aspects of the RDR which the FSA has been keen to focus on is the need for advisers to demonstrate real value to clients to justify whatever fee is agreed.
For IFAs, the ability to provide unrestricted advice from across the market and deliver simple but comprehensive evidence of the work involved will clearly demonstrate their added value.
Backed by the Law of Agency, it will be evident that the professional independent adviser is acting for his clients, which is the way it should be.
It is no accident that fellow professionals such as accountants and solicitors cannot refer clients to tied agents.
Conversely, the restricted adviser’s clients will have less choice and the probability of less flexibility and more expensive products.
When it comes to justifying charges, I believe it is going to be very difficult for restricted advisers. Imagine the conversation with the client when a restricted adviser tries to justify a fee for researching perhaps six providers with a limited range of more costly products.
SimplyBiz serves 2,000 directly authorised firms. When we carried out detailed research with these firms in March, 97 per cent confirmed they want to provide unrestricted independent advice after the RDR.
They know that the true price of restricted advice would be paid by their clients in the form of less choice and higher costs.
They also know that their clients want independent advice. Quite simply, clients want their adviser to act in their best interests and not as the agent for a restricted number of solutions.
We have no doubt that independent advice is the gold standard, so we have made an absolute commitment to deliver to the firms we serve everything they need to prosper as IFAs after the RDR.
To make it crystal clear, SimplyBiz is determined to champion the cause of firms and advisers who want to remain independent.
We firmly believe it is in the best interests of IFAs, their clients and indeed the market as a whole that the independent advice sector remains strong and vibrant.
A strong IFA sector ensures competition, keeps product costs down and provides an open market which in turn delivers better outcomes for consumers.
We think it is essential that all IFAs put themselves in the best possible position to benefit from the services available to them and take advantage of the enormous opportunities ahead for unrestricted advisers.
Ken Davy is chairman of SimplyBiz