Independence

Statement of Independence

AAB Wealth provide an 'independent' investment advice service. Although we believe that our clients will be best served by 'asset-class investing', a core feature of the AAB Wealth service proposition, we acknowledge that 'asset-class investing' might not meet the needs of some clients. Therefore, we provide an 'independent' investment advice service which means we provide unbiased and unrestricted advice based on a comprehensive and fair analysis of the relevant market.

To ensure we continue to provide unbiased and unrestricted advice based on a comprehensive and fair analysis of the market, we have formed an investment policy committee. We meet every six months to review and consider the suitability for our clients of 'active' investment management and the following broad range of retail investment products:

  • Packaged products which includes Exchange Traded Funds (ETFs), Open Ended Investment Companies (OEICs) and Unit Trusts;
  • Investment Trusts;
  • Structured Investment Products; and
  • Discretionary Fund Management.

Background to this Statement of 'Independent' Investment Advice

From 1st January 2013 the Financial Services Authority set a new standard for independent investment advice, aimed at ensuring the advice is genuinely independent and considers the broad range of products that it would expect a firm giving independent advice to consider, when making a recommendation. In brief, the changes are:

  • If a firm provides 'Independent' advice, it will need to consider a broader range of products (beyond packaged products);
  • If a firm provides 'independent' advice, it will need to provide unbiased, unrestricted advice based on a comprehensive and fair analysis of the relevant market; and
  • All firms will have to inform their clients before providing financial planning, advice and recommendations, whether they provide 'independent' or 'restricted' advice.

About Independent Advice

The rules set out a new definition for independent advice, which is unbiased and unrestricted, and based on a comprehensive and fair analysis of the relevant market. This is designed to reflect the idea of genuinely independent advice being free from any restrictions that could affect the firm's ability to recommend whatever is best for the client.

To reflect the range of products that a client would expect an independent firm to have knowledge of, and in line with work that the European Commission has undertaken, the Financial Services Authority has introduced the term 'retail investment product'. This includes not just packaged products, but also structured investment products, all investment trusts, unregulated collective investment schemes and any other investment that offers exposure to underlying assets, but in a packaged form which modifies that exposure compared with a direct holding in the financial asset.

About Restricted Advice

Advice that is not independent needs to be labelled as restricted advice; for example, advice on a limited range of products or providers. Firms that give restricted advice are still required to meet the regulator's suitability requirements even if they offer restricted advice.

Where a firm providing restricted advice chooses to limit their product range to a certain range of investments or providers, there will be clients for whom this is not suitable. It is not acceptable for a firm to recommend a product that most closely matches the needs of the client, from the restricted range of products they offer, when that product is not suitable.