In its latest review of the distribution of retail financial products in the UK, the Financial Services Authority (FSA) as come up with a new definition of independence for financial advisers.

Previously, an adviser was independent if he or she selected products from across the entire market, rather than being tied to a limited number of providers.

Now, the FSA proposes defining independence according to the advisers’ remuneration, with independent advisers being those that charge fees to their clients, rather than taking commissions from a product provider.

Below full independence, the FSA is also planning to introduce a simpler regime with a basic level of advice aimed at customers with incomes under £30,000 a year.

Predictably, the proposals have met with a stormy reception from some groups representing advisers, with some detecting a bias against the small independent financial adviser (IFA) and in favour of the banks and other large financial institutions.

One view is that the proposals would effectively stop Middle England from getting independence advice, as it would only be viable for the wealthy.

However, consumer groups and others sharing the FSA’s view that commissions have tainted advice in the past, have welcomed the proposals.

A good IFA should not be swayed by commission, but the quality of IFAs varies widely and the business model of many is dependent on upfront commissions from product providers.

In simple terms, the FSA’s prospective regime could lead to a world of haves and have not’s. The haves, or wealthy, will be those with the means and inclination to pay for advice.

For those getting basic advice from their local bank and a limited product choice, it must be hoped that product regulation will ensure that the products they are sold are fit for purpose.

And it must also be hoped that these non-independent advisers are not incentivised to mis-sell.

But the big question is whether it will work out like this in practice.

Financial services reforms invariably invoke the law of unintended consequences and IFAs have survived and thrived in the face of past reforms intended to curb their powers.

Don’t be too surprised if adaptable and resilient IFAs find a way of carrying on for a few more years yet.

After all, independence is primarily a state of mind.