6 August 2007

Consumers believe ‘independence' means whole of market (Consumer and Trade)

Following the publication of the Retail Distribution Review this week, by the Financial Services Authority, Unbiased.co.uk reasserts that consumers believe the term ‘independent’ means the ability to choose products from the whole of market.  

A key proposal within the Retail Distribution Review is that some advisers would be entitled to be called ‘independent’ and yet not offer whole of market advice – this could include some advisers who only offer the products of one single company.  This is because the Financial Services Authority (FSA) is proposing that ‘independent’ is reserved for those advisers who agree payment terms with the consumer (e.g. fees or fees offset commission) rather than the product provider (commission) regardless of the range of products they are able to advise on.

Research commissioned by Unbiased.co.uk shows that two-thirds (67%) of consumers believe ‘independent’ in the context of independent financial adviser means the ability to have unrestricted access to the whole of market.   Only one in twelve (8%) believe ‘independent’ means does not receive commission.

David Elms, Chief Executive of Unbiased.co.uk comments: “Many published pieces of research over the last ten years have pointed to the fact that only a small percentage of consumers believe independence should be based on the payment method.   The vast majority of consumers believe that the term independent should only apply to those advisers that can offer advice on products available across the whole of the market.”  

“By using Unbiased.co.uk over 600,000 consumers a year already demonstrate their understanding of the value they place in the current meaning of independence (i.e. whole of market not payment linked).   Over 75% of these enquiries come from third party referrers, including the Financial Services Authority.”

“The Retail Distribution Reviews proposals directly contradict this.   As an organisation that has a long track record of putting the consumer first, Unbiased.co.uk has grave concerns that the proposals if implemented would lead to more unnecessary consumer confusion.”

-ends-

For further information please contact:

David Elms

Andy Smith

Chief Executive

Lansons Communications

Unbiased.co.uk

020 7294 3675

020 7833 3131

For expert comment or case studies from over 200 media-friendly IFAs, journalists should call unbiased.co.uk’s Media Services hotline on

020 7294 3682 or search online at www.unbiased.co.uk/media

Methodology

Research originally published by Bdifferent and Charles River Associates/Continental Research in June 2002.

1.      Independent Financial Adviser Promotion

Unbiased.co.uk is the consumer brand of IFA Promotion, the organisation established in 1989 to promote the value and accessibility of independent financial advice to the public. It represents around 9,000 firms of independent financial advisers across the UK, incorporating over 17,000 registered individuals. These individuals hold over 20,000 incremental qualifications which are each individually verified by the awarding body. IFA Promotion welcomes the prominent display of incremental qualifications and further developments into the credentials of independent financial advice. 

IFA Promotion is sponsored by 29 leading financial institutions, and in the past 12 months, over 600,000 consumers and businesses used unbiased.co.uk to find local independent financial advice.

IFA Promotion believes Independent financial advice should be:

2.      Independent Financial Adviser Promotion’s sponsors

Aberdeen Asset Management

London Mortgage Company

Abbey

Lincoln Financial Group

AEGON Scottish Equitable Plc

Mortgage Express

Alliance Trust

National Savings & Investments

AXA Life

New Star Investment Funds

Bright Grey

Norwich Union Life

BUPA Health Services

Prudential

Canada Life Ltd

Scottish Life

The Children’s Mutual

Scottish Life International

Clerical Medical Investment

Scottish Widows Plc

Defaqto

Skandia UK Group

Friends Provident

Standard Life Assurance Company

Tomorrow

Unum

Invesco Perpetual

Zurich Intermediary Group

Legal & General

Registered Office: IFA Promotion Ltd, 90 St. Vincent Street, Glasgow G2 5UB. Registered in Scotland: No. 114606

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