IFA Promotions IFAP, the independent financial adviser lobby group, recently conducted a survey regarding consumers understanding of ‘independence’ in the context of financial advisers.
Their study found that almost 60 per cent of consumers believe that ‘independent’ should only be used by advisers who have the ability to have unrestricted access to the whole of the market. It is also a popular belief, 68per cent, that to be classified as independent an independent financial adviser should not be owned by, influenced by or tied to a financial institution. However, a smaller percentage, 26 per cent believe independent means that an independent financial adviser does not receive commission.
Our view
These findings show that the proposals by the industry regulator, the Financial Services Authority, to allow advisers to classify themselves as independent even if they do not offer whole of market products are in contrast to the consumers beliefs and wishes.