Independence is still important to investors: 2plan

Investors continue to state that ‘independence’ is an important factor when choosing a financial adviser, according to new research from 2plan Wealth Management.

The IFA-only advice network commissioned 1,000 online interviews with investors holding £10,000 plus in investable assets, finding that 50 per cent would base their decision on whether the adviser was independent or not.

While 56 per cent of those asked how they would go about finding a new financial adviser said they would ask family and friends for a recommendation, only 27 per cent said they would base their actual decision on that.

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Chris Smallwood, chief executive at 2plan, warned that it was important that consumers understood the distinction between independent and restricted advice.

“As recent stories in the press have shown, even internet search engines are sometimes selective in the providers they highlight, based on whether there is a financial incentive for them.

“It may well be certain clients will settle for restricted advice. But this research shows that people that research their financial advice options heavily favour the independent route.”

Earlier this year the Financial Conduct Authority admitted that the Retail Distribution Review changes defining firms as either independent or restricted “are not completely working” as there was a lack of clarity on the definitions of both.

Restricted advisers have complained that the label gave the impression they were influenced by a third party, but the cost of maintaining the independent status has been increasingly leading firms to go restricted.