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&#39Nothing to fear from depolarisation&#39

IFAs have nothing to fear in a depolarised world, according to former Investec managing director Jamie MacLeod.

Delivering the keynote address at this year&#39s Sway Senate Programme in Monte Carlo last week, MacLeod said IFAs have very little to fear if the

FSA presses ahead with plans for depolarisation as long as they continue to offer best advice to clients. He predicted that after polarisation, IFAs will continue to be regarded as innovators and will challenge providers to produce more innovative products.

However, MacLeod also predicted that advisers will become increasingly reliant on multi-managers such as fund of fund providers and fund rating agencies as they struggle to maintain their investment knowledge.

Striking a note of caution, he warned the regulator that it risked alienating people from the market as they would find an advice structure based on the introduction of IFAs, AFAs, multi-ties and tied advisers highly complex.

MacLeod said a system of paying fees for financial advice would not put off investors but would put off savers, the very people the Government is encouraging to invest for the future.

He likened the two-tier advice system, where those who can afford to pay get the best possible advice and those who cannot get a dumbed-down version, as similar to a two-tier medical system and he insisted that people would not stand for it.

MacLeod also fired a shot across the bows of the investment industry, warning that firms with mediocre products would have to slash charges to secure distribution.

He said: “Under current proposals, investor confusion will reign as investors will not understand the different types of advice available. Currently, IFAs have little to fear from a depolarised world as long as they continue to give the best advice. Investment firms will cut thin deals for distribution if their product quality is not high.”

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