Adviser directories Unbiased and VouchedFor have called on the financial regulator to list advisers as being independent or restricted so they can make sure the details are correct.
Both Unbiased and VouchedFor regularly check all advisers on the site against the Financial Conduct Authority’s register to confirm they are properly regulated, are still working for their firm, and their contact information is correct.
However, because the FCA does not list whether advisers are independent or restricted, both directories ask advisers to self-certify their status.
Alex Whitson, chief marketing officer for VouchedFor, said: “We have made many suggestions to the FCA that they list advisers' independent and restricted status, as we could then easily include this within our checks.
“This is a key step in making this information more available to consumers,” he said, adding the status of advisers is difficult information to collect.
Mr Whitson said currently there is no standard for documents or certificates when it comes to proving an adviser is independent or restricted, adding: “This is something we are keen for the FCA to change.”
“At the moment advisers need to disclose whether they are restricted or not at some point before a consumer becomes a paying client, which means it could happen at the 11th hour.
“This isn't helpful for clients who want independent advice but who don't know to ask the question in their first meeting,” he said, adding clients might be “better served” if the FCA encouraged advisers’ to disclose their status earlier on.
I do think the ultimate responsibility for the accuracy of the information it contains has to lie with the directory Stuart AndersonUnbiased’s chief executive Karen Barrett said all the data on the website is provided by the advisers’ themselves, but that details are checked against the FCA register on a weekly basis.
“As far as I know, the FCA does not give updates about whether an adviser is restricted or not, so we ask advisers to self-declare that they meet these requirements and criteria, and they sign up to letting us know if anything changes about the data they have included.”
Ms Barrett said she would welcome it if the FCA provided information on who is independent and restricted, adding: “I don’t understand why the regulator can’t do this.”
“This would mean directories such as Unbiased, and other platforms which are connecting customers, would be able to check that status.”
While it is in advisers’ hands to update their details on the Unbiased website, Ms Barrett said it is rare to see advisers intentionally enter information which is incorrect, adding: “Advisers are good at calling out their colleagues.”
The Unbiased boss also said she hasn’t found any cases where an adviser has failed to update their profile after moving into restricted status.
“We are unable to go through all of our listings and make a decision about whether they are independent or not because we don’t have that backstop in terms of the FCA data telling us.
“But we make it very clear to advisers that they are bound to our terms and conditions to change their information,” she said, pointing out Unbiased has the right to remove or suspend a listing if it suspects data might be incorrect while it investigates further.
The FCA declined to comment.
Stuart Anderson, head of marketing and communications at Clarion Wealth Planning, said: "It does seem that if the FCA polices whether or not firms are independent it should be possible for it to confirm who is and who isn’t.
"Of course, the FCA isn’t there to make directories’ lives easier, but the fact that it doesn’t refer to a firm’s independence or otherwise on its own public register also seems counter-intuitive, given the emphasis it placed on proving independence during the Retail Distribution Review."
Mr Anderson said the vast majority of cases probably involve out-of-date information, rather than deliberate misrepresentation, and suggested directories could "sweep up" most of the errors by emailing listed firms to ask if any information has changed.
"If listings were suspended for non-repliers, they would soon get the information in."
But he added: “I do think the ultimate responsibility for the accuracy of the information it contains has to lie with the directory – I certainly think that the members of the public who use it would see it that way.”
Tony Catt, compliance consultant at TC Compliance, said it would be helpful if information on being independent or restricted was available.
He said it was for consumers to decide about the relevant benefits of each status according to their needs and objectives.
Mr Catt added however: "It is really only industry insiders that make the distinction between the two."
katherine.denham@ft.com
