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Adviser Workshop: How do you prove your independence?
by Brian Cantwell on Feb 11, 2013 at 15:57
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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4 comments so far. Why not have your say?
Neil Liversidge
Feb 12, 2013 at 08:31
What happened to 'Innocent until proven guilty'? How does the FSA prove you're not?
report thisHugh 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...
report thisPhil 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.
report thisSmudger 2
Feb 12, 2013 at 15:29
No man is an island
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