In today’s rapidly evolving financial services landscape, independence is much more than a regulatory label. Independence defines how firms serve their clients, uphold their values and position themselves for long-term success.
Yet true independence is under threat. Many adviser firms that once prized their autonomy are moving toward restricted models or selling to consolidators. This shift is being driven by a complex mix of factors, such as increasing regulatory burden, ageing leadership and the growing lure of private equity (PE).
The influx of PE money and an external stakeholder requiring a return on investment can also lead to poor client outcomes. This shift away from independence comes at a cost, both to advisers and to the clients they serve.
At its core, independence is about objectivity. Independent financial planners are free to recommend the best and most suitable products across the market, and they do this without bias or pressure from product providers or institutional owners.
This neutrality is invaluable and means they can act squarely in the client’s best interest, offering advice that is tailored, honest and genuinely aligned with the needs of the client.
The challenges of independence
Delivering on this promise consistently over time isn’t easy, especially for smaller firms. Regulatory expectations around due diligence and suitability have grown significantly over the last decade, and the burden is heavier for those with limited resources.
It’s worth remembering that independence does not mean tailored solutions for every client
The Consumer Duty, for example, expects continuous oversight. Advisers must rigorously assess platforms, providers and products, not just once but on an ongoing basis. For smaller firms, this creates operational strain and can make compliance, technology and servicing the needs of clients feel overwhelming.
That’s why independence at scale underpinned by shared values is so important.
Large independent firms with robust systems and a culture built on ownership, transparency and long-term thinking can combine highly personalised client service with operational resilience, while continuing to offer an approach that ensures a commitment to client-centricity, free from external influence.
It’s not easy to run a truly independent financial planning firm of scale, but they are needed as an alternative to the vertically integrated, PE-owned models that are consuming the market. It’s important for clients and it’s important for smaller independent firms and individual advisers who are looking for a home.
It’s worth remembering that independence does not mean tailored solutions for every client. Their goals and circumstances are bespoke, but the tools and solutions used can be streamlined, tested and repeated, allowing advisers to serve efficiently without compromising objectivity, quality or trust.
Tim Riseborough: The year of authentic independent advice – a vision for 2025
Independence is a promise made not only at the start of a relationship, but throughout the relationship. It shows its true value when platforms underperform, products merge, or providers falter.
In situations like these, an independent firm can act swiftly and decisively because it isn’t tied to any one solution and because its sole accountability is to the needs of the client.
Making the model work
So, how can independent firms continue to thrive in a world full of external pressure and continuously moving goal posts?
It starts with values – recruiting and retaining people who take ownership and value transparency means firms can ensure they serve clients in the right way, not just the easy way.
This approach also makes an independent firm a much more attractive option for advisers who are thinking about moving their business under a larger corporate umbrella, whether that’s because of the regulatory and administrative burden or for potentially exiting at some point.
To any planner thinking about their next move: choose a firm whose values match yours
An independent firm with values guarantees the adviser’s promises to clients will be honoured.
Building compliance and operational infrastructure early and using technology thoughtfully can also help to establish business efficiencies and support long-term growth. Perhaps most important is the need to create a culture built on trust, where planners and clients alike know they are part of a partnership built to last.
To all those firms already operating independently: hold the line. Independence remains commercially valuable, ethically sound and increasingly rare. To any planner thinking about their next move: choose a firm whose values match yours.
The future of independent advice will belong to those who combine integrity, resilience and scale.
Martin Lockyer is managing partner at Westminster Wealth Management
