Networks will struggle to survive after phase two of the polarisation review, warns one of the big four management consultancies in a new report.
Cap Gemini Ernst & Young vice-president Shaun Crawford believes the Treasury intends to push through plans to scrap polarisation.
Crawford believes small specialist IFAs and those whose clients are mainly corporate will survive but networks whose members come in all shapes and sizes will find it difficult going.
He does not think the FSA is taking the lead on the review but is being pushed by the Treasury.
The report expresses surprise that original plans to allow IFAs to become multi-tied agents were not included in phase one of the review. Crawford says this puts IFAs at a disadvantage because it allows direct providers but not IFAs to change their status.
Crawford says: “This is going to create some issues for IFAs. Networks, especially, are going to have a difficult battle on their hands. Small firms that deal with high-net-worth and corporate clients will be fine because their clients appreciate the value of independent advice.”
DBS chief executive Alan Taylor says: “How can the report predict what will happen in phase two when we do not even know what criteria will apply to remaining independent, which many IFAs will continue to be?”