Is this truly independant?

DancingDragon

Our small, local, IFA has been swallowed up by a wealth management company. Our IFA has now retired and we've had a letter suggesting IFA "Mrs Smith" is taking his place. The letter also states, and I quote, "we are recommending ****** to all of our clients" It's apparently a centralised investment. One of the Directors of the wealth man. co. is also a director of ******. Surely this cannot still be independent advice, can it?

menziesthefish

Strictly speaking, yes. By the letter of the law (i.e. the FCA Conduct of Business handbook) a firm can claim to provide independent advice without having to assess every relevant product or financial instrument on the open market.

However, they must carry out sufficient due diligence of the open market before making their recommendations in order to still call themselves independent.

From COBs:

"nvestment firms providing investment advice on an independent basis shall define and implement a selection process to assess and compare a sufficient range of financial instruments available on the market in accordance with Article 24(7)(a) of Directive 2014/65/EU. The selection process shall include the following elements:

(a) the number and variety of financial instruments considered is proportionate to the scope of investment advice services offered by the independent investment adviser;

(b) the number and variety of financial instruments considered is adequately representative of financial instruments available on the market;

(c) the quantity of financial instruments issued by the investment firm itself or by entities closely linked to the investment firm itself is proportionate to the total amount of financial instruments considered; and

(d) the criteria for selecting the various financial instruments shall include all relevant aspects such as risks, costs and complexity as well as the characteristics of the investment firm’s clients, and shall ensure that the selection of the instruments that may be recommended is not biased.

Where such a comparison is not possible due to the business model or the specific scope of the service provided, the investment firm providing investment advice shall not present itself as independent."

DancingDragon

Thanks for that info. Think I will probably move somewhere else.

xylophone

Think I will probably move somewhere else.

You could search here

https://adviserbook.co.uk/ Tick "confirmed independent" and such other specialisms as are required.

bostonerimus

DancingDragon wrote: »

Thanks for that info. Think I will probably move somewhere else.

Good plan. Who knows what you will be getting. T

SonOf

A lot of firms have been told to drop their IFA status to move to FA status. They try to get away with it as long as possible. Early clues are:
1 - use of Wealth management in the name
2 - use of a single platform and DFM. Or use of parent company's own investments.
3 - cease doing any business with any other provider/platforms and no more transactional business.

DancingDragon

The more I think about this the more surprised I am that it is allowed. Just seems wrong. I have found a couple of possible new ifa using the link above so will be moving on.