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Tony Byrne: What does the IFA brand mean to the public?

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As a firm we took the view that we wanted to retain our independence status when the RDR took effect at the end of last year.

I have always questioned how much the public believe we are really independent anyway, especially the British public because we are a sceptical lot. Does the term independent financial adviser truly engage the public?

After some debate at Wealth And Tax Management we decided we would rather describe ourselves as wealth managers or financial planners rather than independent financial advisers. As we had become accepted by the CII as a firm of chartered financial planners in the meantime we decided to rename our firm Wealth And Tax Management Chartered Financial Planners and drop the Independent Financial Planners part of our title.

We do still value our independence because we truly believe it is in the best interests of clients to have access to independent financial advice. Also we did not want to describe ourselves by the rather clumsy title of restricted advisers and be grouped together in the same categorisation as many other types of adviser who are of varying levels of ability and professionalism, some very good and some very poor.

The beauty of the chartered title is that the public recognise it as a high quality brand which smacks of professionalism and ethics in much the same way as, say, a chartered accountant. I have found that fellow professionals such as solicitors and accountants show more respect to you as a chartered financial planner. It is very refreshing.

On a recent risk management course the tutor explained the FCA’s requirements for remaining independent. Basically all advisers have to maintain knowledge of all types of retail investment products but that one or more persons in the firm can be the acknowledged specialist for example in VCTs, EISs or AIM investments. Advisers have to consider all investment types for suitability for their clients.

Interestingly one of the advisers sitting on the table next to me told me his firm had an FCA compliance visit a few weeks previously and they were advised that they could simply rely on a statement that certain RIPs were not recommended for their clients and give their reasons e.g. VCTs not recommended because their clients are elderly and cautious investors.

So there does remain some confusion over exactly what firms have to do to both prove their independence and retain their status.

Personally I am of the view that you should keep yourself up to date with all types of RIPs because a, you owe it to yourself to be continuously up to date; b, you probably need to prove the knowledge to remain independent; c, you can offer a better service to your clients; d, it broadens the service you can offer meaning greater business opportunities; and e, it earns you CPD points which you need anyway.

I enjoy learning anyway. One of the reasons I am a financial planner is because there is always something new to learn because things are constantly changing.  Life would be pretty dull otherwise.

So keep up to date and enjoy your independence for many years to come.

Tony Byrne financial planning director at Wealth And Tax Management

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Comments

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

  1. ‘Wealth manager’ is a bit too elitist for my tastes.
    ‘Financial planner’ reflects the aspiration that many in our profession have to distance themselves from the image of a [gasp] salesperson.
    In my mind ‘Financial adviser’ is more encompassing of what I do for my clients. Financial planning is only one aspect, young clients don’t have any wealth to manage and quite of lot of my clients with £50-£100k would consider themselves wealthy.
    The independent bit can be confusing for clients who often think that we work on our own as an individual. Also, its not clear if its a reference to the firm or the job title.
    Therefore, for what its worth I am a ‘Financial adviser’ and proud!

  2. To be fair one can be chartered and not even be licenced. It’s difficult to say how appreciated independent status is with the general public but it’s certainly one less obstacle in the advice implementation process with clients.

  3. PC in Shropshire 3rd December 2013 at 1:51 pm

    Whist I agree with Tony’s sentiment in terms of how they have decided to describe themselves, it was only this week that an external file check we had the benefit of this week said:

    Observation: Recommend review of Client Agreement documentation ‘Whole of Market’ quoted in Document which is deemed to be insufficient post RDR. Must be clearly stated if ‘Restricted’ or ‘Independent’.

    We are also a Chartered Firm and are saddled with this unfortunate compulsory use of words (Ind v Res) by our regulator in terms of disclosure post RDR. Not very “Plain English” for Mr & Mrs Average UK

  4. Interesting that independence is satisfied if your clients are far too conservative for some of the more exotic products-this has been my view of my client base too-as long as (presumably) you document it.

    On the broader picture of the meaning of independent this appears to be a continuous bee in the bonnet of the regulator. Over the years a number of criteria have been fashionable but as far as the public is concerned, in my experience at any rate, independence is very simple-it is perceived as the ability to choose from any company in the market rather than being limited to a few or even one. Nothing the FSA or FCA has done has made the slightest impact on this perception and it is time our regulators acknowledged it.

    The question of whether the general public is somehow reassured by our calling ourselves Chartered or Certified it is difficult to be certain. Fellow professionals perhaps but the general public? The industry probably still has some way to go before full trust is restored.

  5. Depends how you define the public.

    As far as my clients are concerned they are well aware of what independence means. They all come to me by referral; either from Professional connections or other clients. They are referred precisely because I am independent and that is what they require.

    The term IFA suits me fine. I am independent and I provide financial advice. Why do we need all these other ‘precious’ titles? As an IFA I plan – ergo I’m a planner. Does that really need to spelt out?

    I manage my clients’ wealth. (Who manages poverty?)

    As far as ‘the man in the street’ is concerned, that is an entirely different matter. Not that I have any great experience in this sector, but I would guess that he/she is pretty clueless. Not that it affects me.

  6. I can’t remember the last time my business cards and letter sign offs had “Independent Financial adviser” on them. I’ve been one since 1998 (and was before that in 1992).
    I care that I am Independent, but my clients just trust me to do what is right for them (not me) i.e. the old definition of Independent. I removed IFA from my job title in about 2000 ish when all the ex direct sales started to scrap their advice arms and all of a sudden ex tied advisers became “IFAs” as if there had been some kin do of epithany. I had always thought “independent is best ” since 1988, but was forced by my then employer to go tied or resign (not good with a 3 year old and a 2 year old) and there were some advantages with being tied for an admin point of view.
    As to exams, surely it depends on the role you undertake with clients? Should it be how high are my exams or how many cub scout badges do I have? Level 10 anyone? Or if you are a generalist, should it be how broad is my knowledge? I have 182 credits on the CII system so far, with results due for another 20 this week.
    You need 290 for your advanced, but to get mine, as I have focused on a broad base of understanding rather than detail in any one area, I’ll end up having to get 392 points. I’ve got
    82 at certificate and hopefully will have 120 at diploma by the end of the week, so I do hope someone recognizes that having a level 6 should NOT be mandatory as it’s not supposed to be about the points either exam or CPD, it is supposed to be about RELEVANT knowledge and maintaining it.
    I especially hope they don’t force Lvl 6 on us as I have another 3 diploma and cert exams I want to do before I start on the advanced (if I ever feel it necessary for my clients), these being J10, STEP and IFQ.

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