Most consumers believe the term ‘independent' refers to advisers who are able to choose products from the whole of the market, according to research from Unbiased.co.uk.
The FSA’s Retail Distribution Review has proposed that the term ‘independent’ should be reserved for advisers who agree payment terms with the customer rather than the provider, regardless of the range of products on offer.
However, the Unbiased.co.uk research found that 67% of consumers thought independent, in the context of financial advisers, meant the ability to have unrestricted access to the entire market. Only 8% of those surveyed believed independent meant the adviser does not receive commission.
David Elms, chief executive of Unbiased.co.uk, says: “Many published pieces of research over the last ten years have pointed to the fact that only a small percentage of consumers believe independence should be based on the payment method.”
According to Elms, the FSA’s proposed definition could mean a financial adviser offering products from a single provider could use the term, provided they agree payment terms.
Elms adds: “Unbiased.co.uk has grave concerns that the proposals if implemented would lead to more unnecessary consumer confusion.”
The FSA began a six-month consultation period on the RDR proposals on Wednesday and the definition of ‘independent’ will be fiercely debated by the industry in the coming months.
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Have your say:
"It seems that the public had a handle on Tied or Independent!!
If it isn’t broke??
"Exams etc. We all work under a stiff compliance regime where our advise is checked on a regular basis. This ensures the suitability of our advice and our knowledge. If an IFA want to spend valuable time obtaining letters to go after their name then let the clients decide if that adds to the advise process or brings extra value. The client will decide in the long run.
Time is precious enough, if we are giving compliant advise at the moment why is it necessary to take yet more exams. Surely it is up to those advisers to make a commercial decision to spend their time obtaining further qualifications. Their advise will still be subject to the same compliance regime." Alan Seward, IFAIFAonline
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