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