Independent vs restricted: Who cares?
Given the arcane nature of the redefined concept of independence, it is not surprising that clients seem to have little interest.
The financial services sector has always been awash with data and statistics.
I’m not referring to pecuniary figures, that is par for the course in a sector devoted to individuals’ personal finances - and these are numbers that matter.
I’m referring instead to the multifarious and seemingly endless stream of surveys and studies that claim to articulate trends in the industry, or represent the views of the sector on one or other hotly-debated topic.
Of course, we hacks invariably report on these often self-serving ‘research’ pieces. Why? Because in as much as there is consensus represented, or where studies are repeated, trends can be identified that, while unlikely to reflect reality, do perhaps offer useful indicators of sentiment.
The subject most in vogue at the moment as far as such research efforts are concerned, in our little corner of the sector at least, seems to be the debate over whether IFAs should remain independent post-2012.
Separate studies by Defaqto in January and March of this year, for example, showed that the number of advisers planning to remain independent has fallen from 87 per cent to 70 per cent. Dafaqto’s narrative in the report suggested this trend would continue and restricted advice would continue to grow in popularity.
This week a study by Aviva, as part of its adviser barometer series, said that 79 per cent of IFAs were looking to retain the independent label post-Retail Distribution Review. This was a similar number that said they would remain independent in the May study.
Again, the narrative suggested the statistical stagnation would eventually give way to a rise in restricted advice in the years to come. Aviva Life’s intermediary head Andy Beswick even said the number favouring independence was “a source of surprise”.
For its part, the regulator itself has published little in the way of data, but its head of savings and investments Linda Woodall did say at our own FT Intermediary Forum in April that they were seeing an increase in advisers choosing to offer a restricted service.
So, what have we gleaned from this surfeit of studies and comment? Taken at face value, this shows the majority of IFAs will retain their current model post-RDR, but that a growing minority are considering becoming RFAs.
This is particularly interesting in light of a study published this week by Skandia, which gathered consumer views on the attractiveness of the different advice models.
According to this research, more than half of the 700 individuals contacted said they would prefer an independent adviser over restricted, compared to just 1 per cent that definitively stated they would prefer restricted.