Big networks and providers have a vested interest in promoting the restricted model to advisers when in reality, there is very little difference between today’s IFA and the post-Retail Distribution Review adviser, Steve Young, commercial director at Sense Network has said.
Mr Young told FTAdviser that providers and networks are putting out “pro-restricted” agendas to entice advisers to become restricted as it will better suit their business offerings.
He said: “They are all wanting to tie advisers to fewer and fewer choices. They say that it will be more difficult to be independent but it won’t be. If you are independent now, you can be independent post-RDR. Practically every provider has predicted that advisers will be restricted post-RDR.
“There is very little difference between today’s IFA and the post-RDR IFA. Too much focus has been placed on esoteric products such as VCTs and EIS when, in reality, these are only suitable for a very small number of clients”.
Bill Vasilieff, chief executive of Novia Financial, agrees that “almost nothing” has changed to be an IFA today and an independent adviser post-RDR.
He said: “From an IFA today to post-RDR, the only thing that has changed is you have to offer an investment trust. Nothing else has changed.
“It is only the big providers that think it will be too difficult to go independent. It’s in the provider’s interest to be tied so they will sell their products. There is a big game going on and some of the big players are saying that it is far too expensive to go independent so they have gone restricted and by the way, we have this solution for you…come work with us.”
Alastair Conway, sales and marketing director at Cofunds, added that although advisers are “slightly more relaxed” about being independent, for the majority of clients, they won’t be operating too dissimilar to the way they operate today.
However, Mr Conway said that it will be more “cost-effective” to be restricted than independent.
He said: “In the majority of cases running a restricted model will be more cost effective than trying to do an independent model. That is just a fact of life.
“I think the stress of them of being independent will be undoubtedly greater than today and therefore even if that is quite simple to do, it is still more onerous than it is today. Restricted is probably no different than what IFAs do today. They don’t look at absolutely everything, they look at most things but under the FSA definition, that is restricted.”
