There has been debate in recent years around whether financial advisory businesses should be independent or restricted.
Findings of various reviews suggest that increased importance is placed by both consumers and advisers on greater independence between products and advice given. From a client perspective, despite confusion around what restricted means, there does appear to be bias towards independent services, especially where the individual has complex financial needs.
Some businesses have chosen to make the move to offer both independent and restricted services. This move has been criticised by the industry as being confusing to the client. Opinion across the industry seems to be that firms should be one or the other so that the scope of services offered can be clearly explained to the client.
Financial advisers seem to gravitate towards independence and have cited its success in terms of increased fee income and better outcomes for clients.
To make the best use of technology solutions, financial advisers tend to utilise an approved product list (APL). IFAs want to partner with a technology provider to ensure open architecture that does not restrict them from providing what is best for the client.
There seems to be a consensus that many clients can be catered to utilising an APL; however, with independence there will always be the need to access whole of market products. Advisers want to retain the flexibility to be able to support clients and improve client experiences with the introduction of new technology in all cases.
Infrastructure and software can be built in line with processes, culture and brand to give clients an individual solution whilst ensuring the business remains compliant. Utilising software for IFAs provides scalability and enables the automation of labour-intensive repetitive elements of the advice process.
Specialists such as Intelliflo provide software for IFAs to enable them to take advantage of functionality within systems.
Clients generally lean towards independence, as they feel they are getting access to whole of market and there is no preference towards certain advice or products.
Interactions with technology are becoming more seamless to better support the advice process; in addition, systems are becoming easier to use, which will help the transition for businesses that have not yet taken the plunge into independence.