SimplyBiz's Davy slams restricted advice as 'road to nowhere'

13 September 2010

SimplyBiz chairman Ken Davy has warned restricted advice will be "bad for the consumer and bad for professionalism". His comments come as new research by the support services group polling over 500 principals of IFA firms found less than 4% are even considering the restricted advice route. This figure, the group says, will be reduced further when it is realised RDR qualifications and remuneration requirements are identical for both independent and restricted advisers. Only a tiny minority of IFAs are considering adopting the “road to nowhere” model of restricted advice, according to SimplyBiz. "The absolute reality is restricted advice is bad for the consumer and bad for professionalism," says chairman Ken Davy. "Invariably the end result is manufacturers and distributors work together to create products that deliver less choice to the consumer at a higher cost. "Whilst it is clearly no surprise that some large organisations, purely for their own commercial gain, are trying to encourage advisers down this route, the reality is it is a road to nowhere for IFAs and their clients'. He adds the survey results are to be expected, despite the "many organisations" predicting the growth of the restricted advice channel post-RDR. Davy thinks the restricted advice sector will suffer the same fate as the multi-tie marketplace which was the subject of similar hype eight years ago. "Multi-ties were a failure in 2002 and under their new name of restricted advice, I believe they are even less likely to prosper in 2013." He adds the same principles underpinning other professions should be applied to the adviser community. "One would not use a lawyer or accountant whose advice was restricted, so why on earth would you take your finances to someone whose advice was restricted to a limited range of solutions." Published by IFAOnline