The term ‘restricted whole of market’ is not a technically recognised term but is being bandied around the industry in the wake of the Retail Distribution Review coming into force.
Evidence of its the popularity of this sobriquet was provided by Google, which automatically offered this as a result when I started typing.
Unbiased - the referral website for independent advisers - even now states that it lists both IFAs as well as ‘restricted whole of market’ advisers. Sifa has also said that it will allow membership to ‘restricted whole of market’ advisers.
But what specifically does the term mean? It seems like a contradiction in terms, like a vegetarian who claims to eat ‘some’ meat.
When I spoke to two advisers, who did not want to be quoted, about what they thought it meant they both gave significantly different views.
If advisers do not have joined-up thinking as to what this means, how can clients understand it? Are we as an industry simply adding further confusion to already muddy waters?
We all know what an independent adviser is. Under the new definitions IFA must consider all the options open to their clients, meaning the whole of the market of products covering every potential product type that could meet the requirement. Simple.
However confusing some claim it may be for clients, the industry also has by now a good understanding of a restricted adviser, who is able to limit their offering in some way, whether by offering products from only a range of providers or that do not cover all relevant product options.
The term ‘restricted’ has its problems, of course - not least that it can appear to denote a ‘weaker’ offering - but the idea behind it is at least broadly understood.
But ‘restricted whole of market’ - what the hell does that mean? What is the restricted element? Are they tied/multi-tied? Or is their advice restricted where they do not advise on all product areas?
Aa blog on network Financial Ltd’s website fleshing out the meaning of independent versus restricted perhaps offers some help.
It says: “So if you never really did advise on ETFs, investment trusts, VCTs and EISs then you can carry on as a restricted adviser. However it is likely that among the usual categories of advice you will be independent and certainly you will be independent of provider. So the phrase we use for this is “restricted (whole of market)”.
I’m interested to hear what you in the community think. Is this term merely adding to confusion around terminology, or is it a useful tag to offer a more positive spin on the FSA’s meaningless definitions?
