The Retail Distribution Review (RDR) of the Financial Conduct Authority (FCA) has new definitions for financial advisers. Advisers will broadly either be "independent" or "restricted". To come within the former category such an adviser will have to provide advice on the whole of the financial services market.  Other advisers will be "restricted" advisers. 

The FCA definition of "independent" is different from the definition used in the Society's Standard of Conduct which provides:-

'You must give independent advice free from external influences or personal interests which are inconsistent with these standards.  It is your duty not to allow your independence to be impaired irrespective of the nature of the matter in which you are acting.'

The Society envisages two common circumstances which may apply to a practice which refers clients for financial advice to existing advisers under the RDR and these are -

  1. A practice continues to refer clients to an adviser which meets the new FCA definition of "independent". No changes in client arrangements are needed
  2. A practice refers clients to an existing adviser which was "independent" (under the pre-RDR regime) but the adviser is "restricted" under the RDR regime. In such circumstances a practice need take no further action provided the adviser continues to be FCA authorised and there is no change to the services provided by the adviser. It would only be where such a practice has concerns about the adviser following its re-classification post RDR that further examination of the adviser's suitability for the client should be considered