Financial firm launches RDR compliant service ahead of new rules in 2013

A new advisory service which aims to offer clear, transparent and truly independent financial advice for more standard and more complicated and riskier products has been launched.

The new service from the Fair Investment Company is Retail Distribution Review (RDR) compliant even though the new rules don’t come into play until 2013. The company said it wants to be ahead and offer product specific advice where clients know exactly what advisors are being paid.
 
‘Some product providers will not let people apply for certain products without getting advice due to their complicated nature, so we provide advice on these as a matter of course,’ explained Nick Scarrett, chartered financial planner and head of investments and pensions at Fair Investment Company.
   
‘But there are certain other products that are also complicated and maybe have higher levels of risk and we feel it is very important that our clients understand them fully. That is why we are offering a product specific advice service as well as full financial advice service and only allow certain products to be applied for with advice. In these cases, the charging structure of the product takes the cost of the advice into account, so the client will not be paying any extra,’ he explained.
 
The Fair Investment Advisory Service aims to help private clients understand the complexities of investments, pensions, protection and mortgage products and helping businesses find the best employee benefit packages, pension plans and advice on how to best protect their business from the death or illness of key employees and directors.
 
Fair Investment Company’s advisers are able to offer products and funds from the whole of the market and all clients receive a free initial assessment with no obligations and any terms of service are agreed before any advice is given.
 
‘Customers can choose to pay either by fee or commission. When a customer pays by fee, if we receive commission from the product provider when they buy a product, we will pass on the full value of that commission in order to reduce our fee,’ explained Scarrett.
 
‘Customers can also choose to pay by commission in which case they do not pay us a fee up front. However, we will always tell them exactly how much the commission will be before they complete any investment and as the commission for investments and pensions is set at the outset, there is no product or fund bias,’ he added.
 
The service has also been set up in order to comply with the FSA’s rules as set out under the RDR which will introduce new minimum standards of qualifications and professionalism for advisers, provide greater clarity over charges for adviser services and product prices by ending the commission structure and instead charging clients an agreed amount for advice, taken as a fee upfront or deducted from the policy
 
‘The RDR rules come into play in 2013 and while many advisers are still not transparent about the way they are paid, our RDR compliant service means that our customers know they are getting truly independent advice,’ said Scarrett.