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Threesixty dismisses SimplyBiz restricted advice claim

Threesixty has rejected suggestions by SimplyBiz chairman Ken Davy that few advisers will consider the restricted advice route after implementation of the retail distribution review.

SimplyBiz polled 500 of its member IFAs and found that less than 4 per cent of SimplyBiz and Compliance First advisers will consider offering restricted advice after RDR.

Davy says: “Multi-ties were a failure in 2002 and under their new name of restricted advice, I believe they are even less likely to prosper in 2013.

“Invariably, the end result is that manufacturers and distributors work together to create products that deliver less choice to the consumer at a higher cost. It is a road to nowhere for IFAs and their clients.”

But threesixty partner David Ingram says: “The restricted advice route is a valid model for IFAs. The multi-tied model is a completely different beast. Res-tricted will suit advisers who pretty much want to stay as they are.

There will, of course, be IFAs who prefer to be independent but to suggest that so few advisers will go restricted is poor.”


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

  1. First of all Ken is more often right than wrong on such matters but I don’t think in this case restricted advice can be discounted. Lets not get emotive about this, I am a firm advocate for independent advice however when faced with an omnipotent regulator that has the power to act as judge jury and executioner, an ombudsman that gives away bribes for the best complaint and absolutely no accountability to the judiciary who would want to defend the new definition of independence before this Mugabe like court?

  2. Matt Timmins (Simply Biz) 16th September 2010 at 2:44 pm

    This is a strange ongoing debate. There have been many posts which agree restricted is a route to nowhere and many who believe restricted will be a large part of the post RDR market and that it will be a good and viable option for many / most.
    We have also heard commentators say that the restricted route is best for firms who ‘want to stay as they are’. I have two points here

    1) Why is it best for firms who want to stay as they are? The only difference is the breath of research one needs to undertake which can be achieved through research software and compliance support

    2) Throughout all these posts I still haven’t come across comments that state why restricted would be better for the adviser or more importantly the client

    Finally, It should be remembered that this is the results of a survey of Simply Biz Members and not the whole market so there may well be those out there who don’t feel they have enough support to remain independent.

  3. Callum Mitchell - SimplyBiz 16th September 2010 at 3:19 pm

    I think this article only goes to illustrate how up to date Simply Biz members are with the RDR and how through careful analysis and rational thought they have arrived at some important conclusions. It also highlights that there are still some serious gaps in understanding amongst many other firms who may well be subject to some scaremongering from parties with vested interests. FSA expect firms who want to remain independent to conduct a fair analysis of the relevant market. They have also stated that they expect firms to use research and / or panel services to help with their selection. So as long as a firm has an independent, transparent, robust and repeatable investment process and has access to research software and good compliance support then they will be able to be independent. These investment tools and software are provided free to all firms served by Simply Biz and Compliance First so they can all be very confident of their position post RDR. I cannot see what advantage there is to being restricted given the tools and support IFAs can access. There is no advantage to firms and certainly none to clients.

  4. This blog is brought to you courtesy of Simplybiz! I hope Moneymarketing are charging an appropriate tariff for this “space”!

  5. I think this is a pretty decent and useful point to debate publicly and David and I would be more than happy to do so on platform. We have considered this in some detail and a few blogs doesn’t really do the subject justice, but suffice to say, threesixty’s business model does not require it to ‘scaremonger’ as we have no vested interest in the direction firms take. Perhaps Callum would like to represent Simply Biz in the debate?

  6. In discussions with may IFAs I have found a great deal of concentration on the major issues of Qualifications and Advisor Charging but actually very little awareness of the new definition of whole of market. The need consider all “Retail Investment Products” for which there is not a prescibed list, just a general definition, could perhaps be one step too far far many IFAs. Id like to think that Ken Davy was right in his guesstimate but fear that perhaps even the majority of current IFAs who survive post RDR may well end up as Restricted.

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