The Government made a big mistake in ending polarisation before it had a chance to bear fruit, according to Positive Solutions chief executive David Harrison.
Harrison believes that if polarisation had not been scrapped, it would have led to all advisers becoming independent, which would have served consumers best.
He also believes that research on whether consumers understood the status of an adviser was clouded by the fact that for many years tied advisers were doing all they could to pass themselves off as covering the whole market before the growing influence of IFAs took hold.
Harrison said: “The Government have made an error. They misunderstood the market and this led them to tinker with things. Everybody would have been independent.”
Harrison earlier told Positive Solutions IFA partners that he believed it was unlikely that owner Aegon would change the Positive Solutions model when it takes 100 per cent ownership in 2006 from its current 60 per cent stake.
He said: “I get asked if Aegon being 100 per cent owners will make a change. I have to say I don't know. But Aegon have not spent all that money to change the model.”
Positive Solutions has almost doubled half-year profits to £803,000 from £437,000 for the same period the previous year. Turnover increased by 44 per cent for the half-year to £16.1m from £11.2m. Turnover for the whole of 2003 was £25.6m and profit was £1.11m.
Adviser numbers at the firm have risen to 875 from 750 at the end of 2003 and 552 at the end of 2002.