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Adviser Workshop: How do you prove your independence?

by Brian Cantwell on Feb 11, 2013 at 15:57

Adviser Workshop: How do you prove your independence?

Martin Bamford (pictured), Nigel Barker-Smith and Campbell Edgar give their tips on meeting the regulator's criteria for independence.

Martin Bamford

Managing director, Informed Choice

There was a lot of scaremongering before Christmas about how tough it would be to demonstrate and evidence independence.

We use research systems such as Synaptic Comparator, which help us evidence it, and a lot of this information goes on file. But this tends to be more for the Financial Services Authority (FSA) than the client.

Our clients, in terms of what they see in the report, take it as read that we’re looking at everything that’s in their best interests. We treat every client as an individual because you have to see what works for each client [separately]. While we have access to model portfolios, we don’t assume they are always the right solution.

Maintaining records on paper

We use online systems, but everything we do gets printed out and goes in an official paper archive as evidence.

We do believe in independence and what we do, but restricted firms can be useful for smaller clients. The independent versus restricted issue was probably brought in by the FSA because of the rise in distributor-influenced funds.

Nigel Barker-Smith

Director, NBS Financial Planning

I don’t worry about evidencing to clients, but we record client meetings in detail that evidence our process and independence.

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5 comments so far. Why not have your say?


Feb 11, 2013 at 22:53

Amazed not one of them have said how they prove independence of all retail investment products, review with Novia , hello single platform, CIP, not whole of market, comparator doesn’t include all retail investment products, wait for the tap on your door from the FSA, or maybe not as they have collected enough from banks this year.

Your clients may as well go to SJP, CIP

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Neil Liversidge

Feb 12, 2013 at 08:31

What happened to 'Innocent until proven guilty'? How does the FSA prove you're not?

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Hugh Jars

Feb 12, 2013 at 09:27

If I were a gamekeeper at the FSA and wanted to test a firm's state of 'indpendence', it would be easy. The logical place to start would not be notes on client files, checking what was said and offered, but a look at the firm's 'Revenue Log '

For a firm who are in teh eyes of the FSA truly independent, you would expect to see income payments coming in from a fairly wide range of sources (ie providers facilitating Adviser Charging), and client fees direct of course. And one- off payments from lots of new / different providers, reflecting a real bespoke approach to each client(s) affairs with from what is a truly massive market place.. ?

Or, might they see a continuation of payments coming in from up to a dozen or so providers.... and Synaptics / Aequos reports simply manipulated, or over-ridden by advisers, to continue using favoured provider / fund groups /platform (s) to continue 'proving' independence.

We have continued as IFA's, but I can't help thinking the Independent /Restricted thing is a huge waste of money by the FSA, and has not helped or clarified anything whatsover for clients...

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Phil Cresswell

Feb 12, 2013 at 09:40

Also worth thinking about a T&C plan that could/would evidence competency in all 8 of the RIP areas for independent advisers compared to restricted.

Tests might be a way for example on ETF's/VCT's/EIS/UCIS/WRAP/SCARP's.

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Smudger 2

Feb 12, 2013 at 15:29

No man is an island

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