View more on these topics

&#39Aifa alternative to DPS could bring big savings&#39

Aifa&#39s alternative proposal to the FSA&#39s defined-payment system would result in one-off savings to the industry of £30m and subsequent savings of £24m a year, according to a cost-benefit analysis.

The CBA, carried out by consultancy Charles River Associates on behalf of Aifa and IFAP, says within the first three years of introduction, Aifa&#39s alternative, called the Menu Based Option or Price List, could save the market £95m a year as it fosters the development of a more competitive advice market.

CRA, which carried out research into commission bias for the FSA when it published CP121 in January, says Aifa&#39s plans would result in considerable savings to the industry compared with the DPS.

The CBA considered three possible scenarios for postdepolarisation – the DPS with big numbers of authorised financial advisers alongside the DPS without any AFAs and the Aifa&#39s price list scenario.

The first would cost £77m in the first year and £65m a year thereafter, the second £77m and a further £71m annually while Aifa&#39s proposal would cost £47m and then £41m thereafter.

Additionally, as consumers begin understanding they are paying for advice and recognise IFAs as professionals, there would be a benefit of £95m a year to the industry.

The CBA concludes that the DPS would offer little benefits which would be outweighed by the costs it would force the industry to swallow upon introduction.

The costs come from training of staff, printing new literature and designing a new payment structure.

Aifa director of public aff-airs Tracey Mullins says: “We accept major change has to take place and it will cost money. What we are saying is the price list or menu-based option would not cost as much of the DPS in its current form.”

FSA spokesman Rob McIvor says: “We welcome this because it is good that what we have put forward in CP121 has provoked the industry to come up with alternatives that would meet the same objective as ours.”


Enterprise Investment Schemes – Spivs

Tuesday, 23 July 2002 Aim: Growth by investing in a film called Spivs Minimum investment: Lump sum £2,000 Opening/closing dates: June 5, 2002/August 31, 2002 Charges: Implicit Commission: Initial 3% Tel: 020 8758 8430

Slander and Pickle show

So, now we know. The long-awaited Sandler and Pickering reviews have emerged from their long gestation period.They have already got their nicknames. An IFA community up in arms about the threat from Sandler have nicknamed him “Slander” for the way they feel he has unfairly portrayed their industry and good old Pickering, who you thought […]

The review from here

If nothing else, last week&#39s reports from Messrs Sandler and Pickering seem to contain something for everyone to dislike.The FSA will probably not like being told that it has to start providing far more guidance on what it is expecting from the rules. IFAs will have some, perhaps understandable, concerns about the products designed to […]

Aberdeen suspends two more split-cap trusts

Aberdeen Asset Management has suspended two more of its split-cap investment trusts, leaving investors unlikely to see any ret-urn on their money.The boards of Aberdeen&#39s high-income trust and leveraged income fund suspended trading last week.The news comes only a week after its media & income trust was put into liquidation.Seven splits from across the industry […]

Flexible reversionary trusts and estate planning

The suitability of different estate planning solutions will depend on the individual’s own circumstances, needs and objectives. When considering the different solutions available there is a trade-off between inheritance tax (IHT) efficiency and access. Overall a flexible reversionary trust provides a greater level of flexibility than a discounted gift trust and can offer individuals a […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm