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SimplyBiz rejects restricted advice route

SimplyBiz says it will not offer support for restricted advisers as it sees itself as the “champion of independent advice”.

Research conducted by the service provider in March suggests only 3-4 per cent of the company’s 5000 adviser members want to offer restricted advice.

The firm believes that remaining independent-only post-RDR will not be as challenging as some predict.

Simply Biz chairman Ken Davy says many nationals and networks could be forced into moving down the restricted advice route post-RDR but that his members are set on remaining independent.

He says: “We are determined to nail the myth that IFAs are not bothered about what type of advice they give, restricted advice will mean more expensive products and less choice. We want to make sure all our advisers have the right tools to offer independent advice.”

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Comments

There are 14 comments at the moment, we would love to hear your opinion too.

  1. I’ll sleep so peacefully knowing that!

  2. Only 3-4% of the 5000 may want to offer Restricted Advice. The question is how many will find that they really have no other choice ?

    As to Restricted being more expensive I would have thought that there was a risk that being a jack of all trades might be more expensive than being a specialist ?

  3. I hope Ken Davy is correct but I fear he could be being a bit optimistic.
    I would be particlarly interested in how he would respond to the concerns expressed by David Traynor of 360 which detailed the difficulties surrounding “demonstrating understanding” of the wider product ranges of RIP,and also the question of PI cover.

  4. The more difficult the process of selecting the most appropiate contracts, the more compliance input is required. This is where Mr Davy sees the opportunity of charging his members larger fees.

    The restricted route would mean reduced compliance and reduced PI etc – so less money for Mr Davy.

    Ken Davy is a business man not a Philanthropists – a “Champion of Independent advice”, don’t make me gaffore

  5. I am delighted to provide some extra clarification for the above. In particular our full announcement states very clearly that there will be no extra charges for these enhanced services. Indeed all the firms we serve benefit from our unique guarantee that our charge will never increase beyond 2.5 per cent of turnover with a cap and collar. The impact of the cap means that the MAXIMUM charge is under £550 per month so above about £300k of t/o the rate rapidly reduces.

    When we introduced this in 2002 the doubters said it would never work, not only does it work but we have been profitable since 2003 and whilst not a charity we have never been afraid of reinvesting to provide ever more enhanced services to our members.

  6. Incompetent Regulators Awards Team 24th March 2011 at 5:05 pm

    Letys face it the whole RDR thing is flawed just like FSMA 2000. But whilst people like Sants, Nichol, Turner etc have the law on their side they will ignore everyone including parliament. It’s all about their own pockets they are looking after and no one elses.

  7. Interesting comments from Dr D and the response from Ken Davy. The 3-4% figure SimplyBiz refer to is based on those who bothered to reply (600?) to their internal survey, so it’s maybe the few thousand who didn’t bother who may be considering the restricted route or even operating in that manner now in reality and post RDR is may be their logical option?

  8. Hmmm

    I guess Mr Davy would say that. I guess they will try to get round the difficult RDR research rules by some guff about anything not a life assurance bond will not be suitable for clients?

    Well, good luck on that.

  9. Having known of Ken (I’ve never met him) since he was President of the LIA I think he is one of a small number of industry “leaders” who has a reputation for 100% integrity. As Simply Biz members with turnover of more than £1 million we have always found the 2.5% cap on charges to be as advertised. I’d be surprised if there was a change to this position in the future as Ken and Simply Biz have too much to lose.

  10. Thanks to Ken for commenting.
    I genuinely am interested in what he has to say about PI cover availabilty and affordability. Again I’m not sure whether SB offers PI as part of its support services, but am sure he will have looked at this issue.

  11. Dr D and the other “anonymous Ken Davy knockers” should either back up their insinuations (and have the decency to reveal who they really are) or shut up.
    I have been a SimplyBiz member for almost 10 years and while it isn’t perfect (what is?) overall I think it is great value for money and Ken is one of the very few industry leaders who speaks up for IFAs and is always positive.
    Try to emulate his example and we’ll all be better off.

  12. Consultant view 25th March 2011 at 11:20 pm

    I’m from the same town as Mr Davey. When I lived there it was part of the real world. Clearly something seeped into the water supply since I left. Most IFAs are not independent now and stand little chance post 2012. It may well be that only 3-4% said they would be restricted; not sure how many of the other 96-97% will have the choice

  13. The issue will not be can you really advise on the whole market but rather can you prove it before a Kangaroo Court such as the FOS? I fear our liability will proliferate in proportion to the number of choices and all with the benefit of regulatory hindsight.

    I hope I’m wrong and I hope Ken is right.

  14. Let’s be realistic about this. Very, very few IFA’s are WoM independent in that they maintain a detailed working knowledge of every contract on the market in their particular fields of operation. Most of them have their panel of preferred providers which they use with good reason for the great majority of their recommendations. They know the contract, they know the systems, they know the funds, they know the charges and, from experience, they know the product won’t backfire and blow up in their faces.

    What independence in the real world means ~ in fact, all it really NEEDS to mean ~ is the ability to advise on all the products available from all product providers, as you come across them, irrespective of whether or not you’d actually recommend any of those products as a good place to invest new money or indeed perhaps to leave money already invested.

    Conducting a comprehensive analysis of the suitability or otherwise of every single pension plan or ISA or whatever for every single client would be prohibitively time-consuming and expensive. 99% of advisers couldn’t afford to do it or their clients wouldn’t be prepared to pay the fee.

    What it basically boils down to is “Look, Mr Client, this is the one I use for my own retirement funding or investments or whatever and here’s half a dozen good reasons why. If it’s good enough for me, I would hope that you have sufficient confidence in my judgement and integrity to accept that it’s probably good enough for you. If you don’t, then you need to be talking to somebody else.”

    Why should the FSA have a problem with that? Oh, I forgot ~ the FSA has a problem with EVERYTHING that everybody else does, whilst refusing to take a good look at its own manifold failings. ‘Twas ever thus.

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