top of page

I get 3 quotes every time I sell a bond; proves I’m independent

The product and the research medium may change, but the principal in the title is one that will probably resonate through many IFA practices as they strive to demonstrate their independence in a post RDR world.

But, is this really what independent v restricted is all about?

The answer goes a lot deeper and lies in the thought process that takes place before the specific product research even begins. The question that needs to be asked is why an investment bond is being recommended in the first place?

Let’s take investment bonds as an example.

Does obtaining 3 quotes or using one of the various research tools available qualify as independent research? Probably, yes, but that doesn’t necessarily mean your advice is independent.

Why is an investment bond more suitable for this client than say a unit trust or exchange traded fund?

There must be a reason and it may be that you consider investment bonds suitable for the majority of your clients, but there will be certain clients or certain situations where an alternative investment is more suitable.

The key to demonstrating your independence is defining these situations and documenting them.

Your business needs to be in a position where, if visited by the FCA, you can articulate to whom and when the various retail investment products (RIP) are suitable and if you do not consider a particular RIP suitable for your client bank documenting why not.

However; this shouldn’t be considered as purely an FCA tick box exercise.

Your clients will expect you to consider the suite of solutions available when helping them build a financial plan.

To implement solutions that help your clients achieve their personal and financial priorities should form an integral part of the financial planning journey you undertake.

Therefore, independence is about so much more than which investment bond. It is about having the knowledge and resources to help fit solutions to clients on a case by case basis.

bottom of page