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Independence: The key to trustworthy advice background image

Independence: The key to trustworthy advice

Independence: The key to trustworthy advice icon

Last month Dixon Advisory, a once respected retirement specialist firm, collapsed into voluntary administration.  In the end, it was overwhelmed by compensation claims and legal actions from 5,000 former clients who had sustained heavy losses from Dixon’s in-house products. 

So, what went so wrong for Dixons? And what can we learn from their business model and the experience of their clients?

Investment product manufacturer

Somewhere along the way, Dixon’s morphed from adviser to investment product manufacturer and distributor.

The outcome was that their clients lost money because of poor investments. And those poor investments were run by Dixon’s.  They recommended them because they received fees.

The fees were high, especially in their US Masters Residential Fund.  This invested Dixon’s clients’ money in apartments in the New York area and undertook renovations.

The fees from in-house investment products created an untenable conflict of interest.  While clients had the expectation of receiving advice in their best interests, in reality they were channeled into high fee in-house products, with ineffective governance controls.

Vertical integration

Vertical integration is a common business strategy. It allows businesses to streamline their operations by taking direct ownership of various stages of the production process.  Some of the world’s most successful businesses are vertically integrated, including Amazon, Netflix, and IKEA.

But none of these businesses have a fiduciary duty to act in their clients’ best interests. Time and time again we have seen that advisers can’t manage the conflict of in-house investment products.  The conflict needs to be avoided.It’s why all the big banks have closed their financial planning businesses. The product conflicts simply cannot be managed.

Gold standard

We believe that quality advice cannot be provided by a product manufacturer, or someone affiliated with a product manufacturer. There needs to be a separation between advisers and the products they recommend.

Even better, advisers should be independent from product manufacturers, so they are free to serve their clients and their clients alone.

At When Financial Solutions, we are committed to independence.  This is evidenced in three ways: 

  1. We don’t have any ownership links or affiliations with product manufacturers;
  2. We don’t receive commissions or incentive payments from product manufacturers; and 
  3. We don’t even charge asset-based fees.

Our advice is unbiased.  We are free to recommend any investment grade product in the market. 

And that’s why you can have confidence that you are receiving trustworthy advice.  It’s also why it’s not a matter of ‘if’ our advice will be in your best interests, but ‘when’.


Michael Bowman and James McMaster are co-founders of When Financial Solutions.  This article is general and does not consider your personal circumstances so it may not be appropriate to you.  If you would like advice specific to you, please give us a call.





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