We Don't Advise On Products

There should be a wall, between advice and products, between advice and large institutions, and between our regulators and large institutions.

We don't sell products, we sell plans


You can identify a product seller as they will hold agencies with product providers, they are therefore agents of the product providers. They may hold an agency with one, a restricted number, or an unrestricted number of product providers. The latter call themselves “independent” financial advisers or IFAs, yet they are still holding agency agreements with product providers. They are not fully independent of providers!


Most IFAs, run in-house model portfolios on their own investment platforms. The in-house portfolio manager then holds agencies with fund houses. This technique is referred to as "asset-hoovering". Their strategy is to plug into billions of pounds of client assets and deduct their fee. The result fails to beat net returns on passive retail multi-asset funds available directly to the public or via Direct to Consumer (D2C) platforms. The resulting cost difference can amount to many hundreds of thousands of pounds deducted from your life savings over a lifetime. These advisers are product sellers of their own products!


A financial adviser who gives advice on products may not necessarily be a financial planner, they may be just a product seller. They are a product adviser.


Financial planning can be given in preparation for product selling, and the same adviser could then sell the product. Here the financial adviser is both a financial planner and product seller.


A financial adviser may call themselves unbiased and independent, most of them (nine in ten in the UK) are still product sellers.


Even when searching online with what you would consider trusted organisations, with search terms such as "unbiased financial planners", this will produce: unbiased.com, localfinancial.co.uk, localfinancialadvice.co.uk, financial-adviser.co.uk, financeable.co.uk … all you get in return is the name of a product seller.


Even which.co.uk and fca.org.uk provide you with product sellers only! Because they are providing you with the names of regulated product advisers. All regulated product advisers are by their very nature, product sellers!


You would think that being regulated makes a product adviser a safer choice. Most product advisers refuse to undertake an oath to put their client’s best interest first, called a fiduciary undertaking.


Nine in ten product advisers charge asset-based fees, according to which? And the Financial Conduct Authority (FCA). This is widely acknowledged in the international markets as conflicted remuneration, and in some countries has been banned.


It is conflicted as the payment is conditional on a product sale and the more they sell the more the adviser gets paid. And the longer the product provider keeps your money, the longer the adviser gets paid. As one Telegraph reader puts it,


“All they want is to plug into your assets and charge a fee.”


You can also identify a product seller as they are required to be registered and regulated by the Financial Conduct Authority. This is because there is a high risk of mis-selling amongst product sellers, that the regulator is aiming, yet repeatedly failing, to mitigate.


The product seller is a product adviser or an intermediating financial planner, otherwise known as a financial intermediary.


We believe that the best way to restore market integrity and trust and confidence in the financial industry is to place a ... wall between advice and product!


We believe that Product Adviser and Financial Planner are two distinct roles that must be separated.


Consumer campaign groups have long called for such a wall to be put in place internationally, for over a century, but the product providers have unaccountably resisted such attempts, by retained authority and power in the corridors of power through their buying power from consumer monies, and lobbyist legislation has always prevented the division.


As the founder of Life Planning, George Kinder, once said:


"There should be a wall, between advice and products, between advice and large institutions, and between our regulators and large institutions. We need integrity that is impeccable. Until we actually institute a way of bringing a good heart, great integrity, and a fiduciary relationship that is sustainable into the industry, we are going to fail. We have to make this change, and we have to make it now.”


Shouldn't all organizations be held to a fiduciary standard of care toward all stakeholders, democracy, and the earth we live on? And if they did wouldn't many of the problems of the world disappear quite quickly, including climate change, threats to democracy, public health, racism, corruption, and inequality?

A Fiduciary standard of obligation is required for all institutions (corporations, non-profit, and governmental) to place the interests of all stakeholders, of humanity, democracy, and the living planet that sustains us, first above their own self-interest. 


In the future, in a post-Covid-19 world of financial planning, we see a growing awareness in the public eye of the need for the wall between advice and product.


What we need to recover from a global economic and medical emergency is financial plans, not the sale of more financial products that reduce disposable income for consumers and fill the pockets of the unaccountable hierarchies of profit and power!


When change happens, and it is beginning to happen internationally, the future financial planner will be a consumer champion, they will be a non-intermediating financial planner.

This is what people have to say about financial planners who give advice on products.

(The names used are those given to the Telegraph newspaper on 18 July 2020.)

“What 'financial advisers' never mention is luck.  And you need a lot of that, 'expert' or not. What amazes me is that punters continue to pay someone to lose their money. Remarkable. The real money is in taking a 50-year view and sticking with it.  That's what charities and some wealthy families will do.  Churning is much loved by experts, but it rarely pays in the long term.” - William Rusbridge 2020

“Maybe there is a market for financial advisers to the rich and stupid but in my experience, these advisers offer virtually nothing and charge a fortune for it.  All the advice you need is free on the internet.  Advisers offer no magical door to better products or decisions. All they want is to plug into your assets and charge a fee.”

R Knewnham  2020


“The FTSE follows the Dow. When markets look like they have gone too far, they retrace. Keep an eye on it, do your own investment, and wise up on tax. Start out in researched funds. Don’t borrow to buy nonessentials and you will do ok without any adviser.” Chester Drawers 2020.


“If they are so wonderful, why don't they keep their secrets and make themselves a fortune. No, it's easier to make money out of poor advice, which in the end is on a guess and really only a gamble. It’s easy to spend someone else's money.” Russell Ellis 2020.


“The only trend I can see after 15yrs investment is that the share value increases to 31st Dec annually when fees are calculated on the % value of the fund and individuals' commission calculations are made based on portfolio values. Then, funds drop in Jan through May and veer between 'creep and rocket' from late Oct to Dec. My IFA is more expensive than average based on this article, but good performance and always available, has been IFA for me for +15 years and my parents before that. Trust is imperative in this relationship and remember always that it's 'your' money so ultimately your responsibility.” Stuart Davies 2020.


“I know an IFA who works from home, about 30hrs a week, 'manages' around £10m for private clients. His current advice is 'do nothing' which may or may not be the correct response, but I am not certain it is worth the £100k pa he charges.” MR Clyde 2020.


“The capacity of people to be taken in by con men never ceases to amaze me. Why pay such people fees to invest in what pays them commission rather than invest yourself after a modicum of research into a wider range of products?” Mick Gould 2020.


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© Academy of Life Planning 2021