Independent vs Restricted Advice – What’s In A Name?

29 May

Have you worked out if you will be receiving independent financial advice after 1 January 2013? Or has it just dawned on you that in the new financial services landscape post-RDR this might not be the case.

Speaking personally, I will always be an IFA (Independent Financial Adviser) otherwise I cannot see how you can give the very best advice.

Advice For Buying Life Insurance

Restricted Advice, in my opinion, the adviser will have a restricted product range or worse company specific products only – I had hoped the day of sales reps pretending to give advice was behind us, I guess not – at least you will be able to differentiate. I assume this is where the Restricted Adviser will say he gave the best available product. This may be okay but is it good enough?

The current debate is far from resolving itself, the independent vs. restricted argument seems to be gathering pace, and as financial services firms spend the next six months truly focusing on business models and how they might have to change ahead of RDR’s implementation date, it will continue to hold court.

The irony is, the process I have used for many years is the standard now being introduced.

The question you must ask is – Does the classification of advice as independent or restricted really matter to you?



Some believe the term “restricted” has a naturally negative connotation and so advisers and advising companies are expected to dress this up in alternative language. The most common being used where advice is restricted is “Wealth Management”, “Holistic Planner”, “Life Planner” – this is not to say these are the only terms or that these terms are not used by those who are independent. Rather, these are unregulated titles and can be used to dress-up and/or hide the true facts.

Companies offering restricted advice, the most publicised in recent years is St James’s Place Partnership, who offer their products through a direct salesforce. They have argued for the name specialist rather than restricted – what occurred to me is, the advice and products that may be provided does not guarantee specialist advice will be provided.

The point is, whatever you choose, independent will just sound and in my opinion is better.


A Professional Advisers’ Opinion

There are varying estimates from a whole range of sources when it comes to putting a figure on the amount of advisers that will remain independent after RDR is implemented on 1 January 2013.

A common theory seems to be that many advisers will make the transition to restricted to save time, costs, effort and to reflect their qualifications and the services they provide.

The excuse given, due to the level of professionalism, qualifications and expertise needed to maintain independence  many will see  this as just becoming too hard, particularly given the resources it will require.

Is it better to be a professional independent adviser, or a restricted adviser hiding behind titles, such as, ‘specialist’ to camouflage the truth? Well, I can see the benefit to the adviser of “restricted advice” as it offers a more limited service, easier to administer and with fewer choices to the client.

I know which I will be offering, but let me know what you think…

My contact details are :- tel 029 2020 1241, email, twitter welshmoneywiz, linkedin Darren Nathan

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