Advisers turning away from independent advice models

An increasing number of financial advisers are turning towards the restricted advice models, threatening independent advice’s role as the dominant market force.

Research compiled by Skandia has revealed that the restricted and the mixed model have generated an increase in popularity of 86% and 73% respectively between the first quarter of 2011 and now.

Comparatively, the independent model has reduced in popularity by 24%.

Nick Dixon, marketing director at Skandia, says: “We must not forget that it is the underlying advice that adds the real value to the client. (article continues below)

“Advisers need to consider whether they can satisfy the needs of their clients from a restricted product range, and if they can, then running a restricted advice model could be the most cost-effective solution.”

He adds: “Restricted advice on a ‘chartered financial planner’ basis is likely to become an attractive customer proposition for many advisers.”

Skandia suggests that independent advice is likely to remain the dominant market force in the market but observes that 17% of advisers still remain undecided as to what model to chose.