1825’s restricted status does not equal advisers shoe-horning clients into unsuitable products, chief executive Steve Murray has said, as he seeks to distance the firm from a narrow definition of non-independent advice.
Founded last year when Standard Life bought Pearson Jones from Skipton, 1825 offers restricted advice with products from a list of providers including Canada Life, Axa, Novia, Prudential and Cofunds.
But Mr Murray said he wanted to make sure advisers are not “shoehorning” their clients into unsuitable products.
He said: “We are calling ourselves restricted, but the advice people will be able to give is very broad and we are looking to broaden that over time.
“If we see gaps in our proposition, advisers will be able to go outside those panels; we want to make sure we are not shoehorning people into things,” stated Mr Murray, adding: “If we realised it needed to be broadened out, you could step outside the proposition and look at the whole of the market.”
Restricted advice has been on the rise in the years since the Retail Distribution Review, which saw the rules around independent advice tighten. According to Apfa, 9 per cent of income in the financial advice industry in 2013 came from restricted models while in 2014 this surged to 20 per cent.
It went down slightly in 2015 - but remained broadly similar - at 18 per cent.
In recent weeks, 1825 has bought Norwich-based Almary Green and central Scotland-based Munro Partnership.
When he announced the sale of his company to 1825, Almary Green managing director Carl Lamb admitted he had not taken the decision to renounce independent status lightly, but said the argument for independence has weakened with the pressures on affordability.
Following its two recent deals, 1825 has 59 financial planners advising 8,700 clients on more than £2.6bn of their assets.
Mr Murray said 1825 is aiming to reach 150 advisers, which he said would give the company national coverage.
“Our desire is to make sure we have quality financial advice and that we build things in the right way. When we get to the point that we have 150 advisers over the next few years we will have a look and see what is appropriate.
He added that 1825 expects to see some organic growth over the medium term. “In most industries, particularly ours, personal recommendations tend to be a good way for people to grow and the firms we are working with have got strong partnerships.”
