Paul Bradshaw – the man behind Skandia and latterly Nucleus, Annuity Direct and a number of similar advisory ventures is a canny man-   it was not for nothing that he offered a bottle of champagne to anyone who could truly claim to offer independent financial advice. 

What’s more Paul – you asked me to answer  the question on this blog.

Traditionally, the concept of independent advice has assumed a “whole of market ” approach; that’s to say the product reccomended (sorry solution recommended) would have been selected from all possible alternatives after extensive product research and an exhaustive suitability exercise where the needs of the client were matched to the capabilities of the solution.

In as much as this hasn’t happened, isn’t happening and won’t happen – Paul’s champagne is safe.

 Unless some brave Regulator changed the rules, the concept of “whole of market” advice is a non-starter. If you are Man Utd or an investor with equivalent means and clout – you may go some way to getting the best footballer/asset manager around –  albeit for a fat fee. But we are not  talking here “mass market” or at least “mass affluent” advice here.

Nor can we suppose that advice from investment whizzos is in any way joined up. I know a chap who is retained by a Russian Oligarch simply to get access to the best hedge fund managers and their ideas. But he wouldn’t know a pension from a cuttlefish nor need he.

The super-rich or even the mass-affluent , if they are to aspire to having specialists to manage their financial affairs , cannot rely on the services of a single adviser –  indeed it is hard to think of a financial firm that has the scope to advise across the range of products that an oligarch might access. In terms of individuals or organisations Paul’s champagne is safe – we should not expect to get indpendent advice across the board from a single adviser of firm of advisers- too many conflicts- too much information.

But wait! Whose hand is that stuck up at the back of the class – Tapper’s?!

How can I possibly count myself an independent adviser?

Well I may not know the perfect answer myself  but I know a man – well likely as not a woman – who does.

We are moving from formal advisory models to advisory networks that can exist on linked in (the Play Pen) or be hosted on specialist sites (Mallowstreet) or can exist off line (the Pensions Network).

People come to me to find someone I know who can solve such and such a problem. From my connections bank I make recommendations. When the work is something  my firm, First Actuarial can do, I say straight up I can’t help  because I’m conflicted. I can tell them they can go onto www.trusteeweb.com  or Mallowstreet and ask those there who they’d chose. Trusteeweb has a formal rating system devised by Anthony Hodges and developed by the Trustees and Managers on the site. It is totally uininfluencable because it is powered by buyers and not sellers. Mallowstreet is similar though there are lots of consultants on it (not so independent).

Here then is my point. Independent advice exists where the adviser is totally unconflicted. The adviser does not have to omnipotent or omincogniscent, he or she just needs to know someone in the chosen field who is.

The new model is not about being a one stop shop. Instead it’s about being a hub or portal. The new independents don’t even have to be regulated – they just need to know people who are (take Martyn Lewis as an example).

A bottle of champagne can be send to me at my usual haunts which are well advertised on all the best sites.