Advocate: Should adviser bodies accept restricted advisers?

We are currently independent financial advisers and will continue to remain independent post-RDR. However, the commercial reality for many advisory companies is that clients will not pay the same fees they enjoyed within a commission environment.

The major objective of trade bodies such as Apfa, the IFP and the PFS is to improve the quality of financial advice that consumers receive by improving the advisory and technical abilities of their members.

I am a very proud member of the PFS and it has championed the attainment of chartered status for it members. Likewise, the IFP promotes certified status as the gold standard. Many advisers working in the independent sector currently have those credentials but, post-RDR, they will form part of the restricted sector.

One of the roles of trade associations is to raise professional standards across the board. Many restricted advisers offer the same level of professionalism as an independent adviser but with a smaller choice of providers to work with post-RDR.

Many top 100 companies such as Towry, St James’s Place and Openwork have elected to be restricted advisers, but should we exclude large companies from trade associations?

The generation of income is also critical and focusing on independent advisers will only hamper trade bodies’ ability to generate fees. Running at a loss from year to year is not sustainable; trade bodies face the same commercial reality as advisory companies. Generating a profit helps to improve the service they deliver to members, resulting in better outcomes for the consumer.

No: Philip Haden, director at McCarthy Taylor Chartered Financial Planners

Adviser bodies should not allow restricted advisers to become members. The industry is tainted with past mis-selling, which we fear may continue in product sales-driven businesses.

The ongoing drive to increase professionalism in the industry would be enhanced by restricted advisers not being able to join the likes of the Apfa and would help accelerate this improvement.

We have joined IFA Centre as we feel it reflects our views and ethos and agree with its stance to not allow restricted advisers to join. We prefer not to be put into the same category as restricted advisers.

Unfortunately, this is a numbers game and the decision to allow restricted advisers to join a professional or trade body may be the result of lobbying, friendships, commercial interests and incentives as opposed to demonstrating members’ commitment to putting the clients’ best interests first.

Apfa’s precursor Aifa posted a pre-tax loss of £153,665 for 2011/12, an improvement on the £194,419 loss the previous year. Accepting restricted advisers may, therefore, help it to generate a profit in 2012/13. McCarthy Taylor is passionate about independence and has resigned its Apfa membership of many years due to its willingness to accept restricted advisers.

We strongly believe advisers should be independent to ensure clients receive the best possible advice. There should be a clear difference between independent and restricted advisers and they should have different regulators, providing greater transparency for the public.