Mazars voices restricted advice fears

Fee-based Mazars Financial Planning says IFAs will play a key role in shopping to the FSA evidence of restricted firms masquerading as independent.

Chief executive Paul Willans says there is nothing "wrong" with operating in the restricted space but warns they must not "overplay" their true offering.

He says effective mystery-shopping will be vital for the FSA to establish if any obfuscation is going on, but says independent advisers will also have a part to play.

"My only concern over restricted advice is if elements arise whereby they [firms] are overplaying their true offering. Clients are going to need to know which it is firms offer.

"Any attempts to obfuscate must be stopped and I would like to think some effective mystery shopping by the FSA will nip it in the bud. I also expect independent firms to whistle-blow where necessary."

Mazars' warning follows similar concerns raised by the Institute of Financial Planning (IFP) last week, which called on the FSA to beware firms operating in the restricted advice space using ‘weasel words' to hide their limitations.

In its response to June's RDR Feedback Statement, the IFP said terms including ‘best of breed' and ‘whole of market', such as in fund choice through a single provider ‘bond' wrapper, should be outlawed for restricted practitioners.

"The FSA should be especially aware of the tendency of these [restricted] firms to use weasel words to hide their true status, and these should be specifically forbidden," it says.

"In the past, many firms who have chosen for commercial reasons to restrict their offering to consumers have attempted to disguise that restriction in order to maximise their commercial gain."