A Wall Between Advice and Product: Restoring Market Integrity to Financial Services

For too long, the lines between professional financial advice and product sales have been blurred. This lack of clarity has not only led to a series of high-profile mis-selling scandals and service failures but has also undermined public trust in financial services. To restore integrity and confidence, we need to build a clear wall between the financial services profession of advisers and planners and the financial services industry of product providers, their agents, and distributors.

Putting Consumers First

True consumer advocacy requires a commitment to act solely in the best interests of the client. This is impossible when advisers and planners have ties to product providers. Conflicts of interest arise when the same individual or organisation that offers financial advice also stands to benefit from the sale of a specific product.

It’s time for the profession to step up and act professionally—as true fiduciaries on the side of the client. This means prioritising trust, transparency, and independence. Enter the Generic Independent Financial Adviser (GenIFA).

The Role of GenIFAs

GenIFAs represent a new breed of financial adviser—one that is entirely independent of product providers. Unlike traditional financial advisers, GenIFAs focus on providing generic advice and guidance, empowering clients without the influence of specific product recommendations. This model ensures that advice is truly impartial and tailored to individual needs.

But the challenges go beyond individual advisers. The very system of financial services regulation and representation is compromised.

Systemic Challenges

The Financial Conduct Authority (FCA), the UK’s financial services regulator, exemplifies these systemic issues. While its primary objective is to protect consumers from harm, it also has a secondary objective: to promote growth in the financial services sector. This dual mandate creates a conflict that undermines its ability to serve consumers effectively.

Similarly, the professional bodies within the financial services industry are heavily influenced—and in some cases controlled—by banks, insurance companies, and asset managers. Astonishingly, of the 70+ industrial bodies and professional associations in the UK’s financial services market, not one represents the interests of GenIFAs.

The Underserved Majority

Another glaring issue is the exclusion of 92% of the British public from the adviser and planner community. Many advisers focus on serving wealthy clients who can afford to delegate financial management. This leaves the majority of people, who have limited wealth, unsupported. These underserved individuals often turn to friends, family, or unqualified online “finfluencers” for guidance, exposing them to misinformation and potential harm.

Empowering the Public

GenIFAs aim to bridge this gap. By providing tools, education, and accessible support, we can empower individuals to become their own financial planners and advisers. This approach not only addresses the advice gap but also builds financial confidence and capability within communities.

To support this mission, we have launched the M-Power movement for money empowerment. This initiative is designed to make financial planning accessible to everyone, regardless of wealth or background. Through education, guidance, and resources, M-Power empowers individuals to take control of their financial futures.

You can learn more about the M-Power movement here.

A Call to Action

Restoring integrity to financial services is a shared responsibility. It requires a collective effort to promote transparency, independence, and empowerment. Whether you are a financial professional or a member of the public, you have a role to play in reshaping the future of financial advice.

Together, we can build a system where advice is truly independent, conflicts of interest are eliminated, and everyone has the tools and support they need to achieve financial well-being.

Join us in this movement for change. Let’s work together to create a fairer, more trustworthy financial services market.

Q&A: Building a Better Financial Services Market

Q: Why is it important to separate financial advice from product sales?

A: Mixing financial advice with product sales creates conflicts of interest. True financial advice should be impartial and focused on what’s best for the client, not influenced by the potential to earn commissions or fees from selling products.

Q: What is a GenIFA?

A: A Generic Independent Financial Adviser (GenIFA) is a financial professional who provides advice without being tied to specific products or providers. Their focus is on empowering clients through impartial guidance without product sales (unlike the FCA’s version of guidance that comes with product sales).

Q: How do GenIFAs differ from traditional financial advisers?

A: Traditional advisers often recommend specific products and may receive commissions or asset-based fees from providers, or with deductions from products facilitated by providers. GenIFAs, on the other hand, offer generic advice that is free from product bias, ensuring clients receive truly independent support and are paid directly by the client, typically at an hourly rate.

Q: What role does the FCA play in financial services, and what are its challenges?

A: The FCA regulates financial services in the UK with the primary objective of protecting consumers. However, its secondary objective of promoting growth in the financial sector can sometimes conflict with its consumer protection role.

Q: Why are so many people underserved by the financial advice market?

A: Many advisers focus on wealthier clients who can afford their services, leaving 92% of the public—those with limited wealth—without support. These individuals often turn to unqualified sources, which can lead to poor financial decisions.

Q: What is the M-Power movement?

A: The M-Power movement is an initiative aimed at making financial planning accessible to everyone. It provides tools, education, and resources to empower individuals to take control of their financial futures.

Q: How can I get involved in this movement?

A: Whether you’re a financial professional or someone seeking to improve your financial knowledge, you can join the movement by learning more about GenIFAs and the M-Power initiative. Visit the link provided in the article to explore further.