Mattioli Woods considers move to restricted advice

could someone frm Mattioli Woods tell me why IFA's cannot research the market? There are loads of tools out there that give us the information we need- has he had his head buried in the sand for the last ten years? No problem with them moving their business but please don't have a pop at iFA's now you don't want to be in that marketplace!

Sounds like he has read the SJP sales pitch ...

"Now then Mr Client we have chosen not to be Independent because ...."

please complete the next 10 words ..best reply get a prize

Mmmm , Sounds like a logical step to make in the market place , if you ask me.

Especially regarding the risk aspect, in the rapidly approaching new RDR world..

Interesting comment “Another IFA”, are you really sure you can demonstrate you have looked at all investment mediums for the little old lady with £10,000.00 to invest and be able to charge enough for the service to run a profitable business; or are you saying your clients are all HNW and will require you to consider VCT's, EIS's etc etc; or at least be prepared to say why you have discounted these for your client?

It is my understanding that the later statement is what the FSA are looking for. This will disenfranchise low net worth individuals (LNW) from their advisers and turn them over to the Banks to be robbed blind. Small IFA practices don’t have the luxury of only looking after HNW individuals and don’t like to turn people away who require help and advice. The alternatives forced on us by the FSA and RDR are only advise those who can afford to pay and cull those who can’t.

One alternative is to work for an E.U. regulated company and work under MIFID regulation. The FSA have recently stated they do not care about the imbalance RDR will cause when competing with European advisers and believe me the UK is going to be the prime market come 2013 for a lot of European companies.

actually Mr phillips yes we do and always put the alternative products considered in the suitabilty letter- but given we are not complaining about MW's decision the comments I made were just why don't they make their decision without having to comment on the general IFA community

Glad to hear it anotherIFA, please tell me how long your suitability letters are and why you would even start to consider the un-considerable for a client you know the product / investment will not be relevant. Is it that you have set letters that state the whole universe has been sourced and these are the products / investments deemed not suitable “please delete accordingly”. Do you have the quotations, Key features etc available to prove you seriously considered the un-considerable? It is jumping through hoops because we are told too that really sets my blood boiling and yes it is possible to waste time and money in the name of compliance; but can you make a profit at the end of the day?

I agree with anotherIFA on this actually on the point of Woods should not be commenting on the Market place that they are leaving behind. As they have been in the IFA Market and promoting the benefits it's unfair to critisise it when it no longer suits their business strategy. Granted there are arguments for and against but it's a cheap parting shot I believe..

“To be [an independent] adviser, we would have to demonstrate to the Financial Services Authority (FSA) we have adequately researched the whole of the market in terms of investment products, when for a big swathe of our market it is irrelevant.”

- The FSA have categorically said that you don’t need to research an investment product if you feel it’s not appropriate for your client, you just need to be able to consider it in the (perhaps rare) circumstances that it is appropriate.

-To say that the FSA have no particular concerns with firms that are both IFAs and SIPP providers is also pretty wide of the mark. I presume that MW have not read the guidance to advisers (FSA Fact sheet) from 2009 after the SIPP operators thematic review (on page 2, under the heading “Conflicts of Interest”). This is very much on the FSA radar.

It will only be a matter of time before some forward thinking software company collates details of all that will be required to be IFA post RDR. So the IFA will pay the monthly subscription, enter the client search criteria and in the style of Aequos or the like, out will pop a list of possible solutions. I want to remain as an IFA post RDR but can see challenges meeting the requirements. However, if your client is not a sophisticated investor, then you are unlikely to be recommending the more obscure solutions. What is sad about the whole affair is the apparent lack of communication on exactly what will be required post RDR as until we have that how can we make a proper decision.

The issue of client profitability will be down to individuals to decide what they want to undertake and how they will get paid for it. Mattoli Woods comments seem very logical for them. An interesting thought is will an adviser that excludes Mortgages from the service offering be able to call him or herself Independent? Independent v Restricted is yet another area to confuse the consumer and as yet I haven't seen anything produced to help the consumer to understand what is being done and how they will benefit.

Last point and tenuously related, wouldn't this whole issue about commissions etc have been better dealt with by making Customer agreed remuneration a manditory requirement just like giving a client a business card? We all give a business card because they help the client and us and because if we don't we are breaking FSA law. So logically, if FSA law said you have to have a signed remuneration agreement with your client, we would all be doing it or being outside the law. Manditory Remuneration agreements would have been a lot less damaging than the current plan.

@ Oliver, hopefully you are correct that common sense will prevail and you don't need to look at areas of no relevance to the client profile, however when has common sense and the FSA ever been seen together in the same document. Please send me a hyper- link to where I can see this for myself.

Totally supportive of John Phillips.

I would think, if you were doing all that work for a small investment, that you're not using your time productively and economically.

This is why Restricted can be a very useful model, for select clients and products - where you know that the cost of servicing that client need in a fully advised capacity isn't going to be cost effective.

It's nothing to be feared. Look at it sensibly, rationally, and from the vantage of at least knowing who your customers are - it might well work for you, too. Objecting on the basis of "being an IFA" is a nonsense, unless you'e done your homework.

@Charlie:

"It will only be a matter of time before some forward thinking software company collates details of all that will be required to be IFA post RDR. So the IFA will pay the monthly subscription, enter the client search criteria and in the style of Aequos or the like, out will pop a list of possible solutions."

So, who is the IFA? You or the software? I think tools will come in handy to fulfil the requirements, but they're not going to be some kind panacea to the challenge of being genuinely independent.

Apparant lack of communication on RDR? Numerous consultation papers, roadshows, fact-sheets etc....?

Could it be your just not looking hard enough? lol

Although i will confess the content of the comms may be questionable, but i have to laugh at that statement. There has been boat loads of information on RDR.

I think this is always evidenced on these blogs by the fact some people (who clearly havent read the blurb from the FSA and persumably take their steer from blogs like this!) seem to not know the basics while others seem to have the answers....which would suggest the communication is working for those that want to hear/read/see it!

Oliver good point and the RCRO outlined Centralised investment Propositions - something the FSA is currently looking into i believe, if a firm had sales process which moved clients down the line of an internal discretionary service (within their own SIPP wrapper) im sure they would have something to say about it.

Conflict of interest? Not half!

Restricted models are the destination of the self-served i.e. product providers and loss making networks/nationals. Absolutely nothing in it for the end consumer or the adviser. Providers get distribution in the absence of kick-backs and enhanced commissions, and networks/nationals get a big payment this year to keep them in business another year.

Whether or not he's right about the course of action they're considering I'm not sure, although I do appreciate the issues.

What I don't quite follow though (at least from the article as written above) is that he is somehow "having a go" at those of us who beleive remaining independent is the way to go. Certainly he's expressed his view as he sees things on which he's based his decision, but if purely expressing one's views in what seems to be a reasonable considered way is having a go, then I guess every time we disagree with someone else's opinions we're all having a pop at each other.

Are we - really - I thought that was classed just as informed debate......

Dear Mr Client;

I have pleasure in enclosing our invoice for the work undertaken to place your recent investment.

Cost of advice recommending the actual investment; £600

Cost of researching and explaining reasons for rejecting irrelevant investments; £800 (inclusive of £150 disbursements for printing 600 irrelevant fund/product factsheets as appendices to our report)

Total cost £1400 for advice and disbursements.

Plus delivery charge of report by lowloader with integral forklift truck........

You get the picture

And these jokers at canary towers think RDR is going to give better outcomes for clients.... oh yeah?

How would the move to "Restricted" affect the firm's relations with Solicitors and Accountants regarding introductions?

I know that SIFA had started looking at their own definition of "independent" to give a steer to sols&accs as to what they should be looking for but all seems to have gone quiet on that front.

Apart from the word itself that seemed to me to be the biggest drawback of becoming Restricted

I find these blogs fascinating sometimes. While I can't admit to having all the answers, some of these posts show just how confused/wrong some IFAs still are over what the RDR actually means in practice.

If you are an IFA and a SIPP provider like Mattioli Woods, then you are hardly going to be able to call yourself independent if you automatically recommend your own SIPP every time you determine a SIPP is appropriate for any given client. Mr Woods' conclusion is therefore a logical extension of their business plan, although I can't see where Mr Woods is coming from in relation to research.

Oliver and Enlightened One have done their homework re RDR. If there are advisers out there that think they need to put hundreds of irrelevant KFD's on their file for every case, I suggest they seek help from someone who knows what they're doing, and to do so pronto.

It is clear from the above that nothing is clear so MW seem to be making the only logical call

So is the PRU in appointing a Direct Sales force

@James and others before : IFA Centre is representing and supporting independence. If you want the links to the FSA rules and guidance on the question of independence and what is expected of you then please e-mail me or read any of the several pieces, usually entitled "myth-busting".

Go Restricted if you think it serves your clients better than being Independent. But don't go Restricted because there's "not enough information" or "it's too confusing" - there's plenty of balanced and accurate information and it's people or firms with other agendas who seem to like making it confusing.

By the way MW will be Restricted. The Pru will be Restricted. Anyone spot the difference??