Eight out of the 10 biggest advice firms are using the restricted model post-Retail Distribution Review, marking a substantial swing from a pre-RDR independence ratio of 4:1 following the advent of the new advice definitions under the rules
According to research by VouchedFor.co.uk, a website where customers can rate and compare financial advisers, of the 10 largest companies offering advice as defined by Financial Adviser’s annual Top 100 FAs list, only Hargreaves Lansdown and AWD Chase de Vere will continue to keep their direct advice offering independent.
A statement said that firms migrating from IFA to restricted models include Towry, Lighthouse, Brewin Dolphin, Investec Wealth and Investment, Charles Stanley, and Close Brothers.
Previously St James’s Place and Skipton Group were the only two non-independent firms in the top 10. Both will operate under the restricted banner post-RDR.
The substantial swing to restricted advice among the largest firms stands in contrast to survey responses from the wider IFA sector.
Last year (20 November) the Financial Services Authority published research in which only 8 per cent of adviser respondents said they were independent and planned to go restricted, while some 58 per cent said they were independent and intended to stay that way.
A spokesperson for Skipton said: “Our advice offering will fit under the ‘restricted’ label as we will not necessarily be offering access to the entire range of possible investments. We believe that our current range of investments meet the needs of the vast majority of our customers.”
“We still offer the same wide range of products - access to over 3,000 funds from over 70 providers - now as we did pre-RDR.”
On the other side of the debate AWD said it was staying independent as it sees this as the only way clients best interests will continue to be served.
Patrick Connolly, head of communications for AWD Chase de Vere said: “We believe that taking independent financial advice is the only way clients can benefit from a comprehensive and full analysis of their needs and unrestricted access to potential advice solutions.”
The news follows announcements by the Solicitors’ Regulation Authority that solicitors will be allowed to refer clients to restricted advisers, and that Sifa will expand its membership criteria to include non-independent yet whole-of-market advisers.
Speaking to FTAdviser, Sifa founder Ian Muirhead argued that the new definition of independence does not align with the commonly-held view equating it with impartiality.
