What’s the point of independent advisers?
So what is the point of independent advisers? This question was thrown to me in a three way discussion with an executive at a large fund manager and a legal/regulatory expert. Their views can be paraphrased as follows:
“Small independent advisers will not exist in the future. They tell investors they review all available product and choose the best, but don’t have the resource to do that – that misleads investors. Every adviser should be tied to one provider so investors know exactly what they are getting. That is the future of advice.”
Have we really moved on from the need for independent advisers? If not, what is their function in the market?
First place to start is to define what we mean by “independent” advisers. To me this means non-aligned – they are free to choose any product provider. They have no quotas, targets or business arrangements that sway them towards a particular provider. They can continually look at what is available in the market and choose what they see as best for their clients. This article focuses on small independent adviser businesses but we also need to acknowledge there are many larger firms that can be called independent.
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