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&#39Provider stakes in IFAs cast doubt on independence&#39

Product provider investment in IFAs calls into question the independence of the advisory firm, according to Standard Life group chief executive Sandy Crombie, who says Standard would never consider such a move.

Speaking to Money Marketing this week, Crombie said that product provider investment – common in recent years as manufacturers and distributors have tried to second-guess the outcome of the polarisation review – colours the relationship between the two parties.

He said that Standard Life would only ever make any investment based on potential returns and not in any attempt to control distribution.

Crombie went on to say that a big company like Standard could not possibly know how to best run an “entrepreneurial business” like an IFA and it would be “arrogant to suggest it did”.

He said Standard would compete aggressively to be on multi-tie panels but only on merit, rejecting any suggestion it would agree to pay cash or other benefits to appear on a panel, as has been rumoured to be occurring in some quarters.

Crombie said: “My personal view is that we should invest in things that stack up on investment growth. I do not think that I should be investing in IFA businesses for strategic reasons. We cannot add value to that. I think it does colour the relationship. We should not be investing directly in the shares of IFA business. In this business, quite often, we do well by not doing things.”

Positive Solutions chief executive David Harrison says: “I have some sympathy for the view that when a provider takes a small stake in an IFA it is done in preparation of multi-ties.

“That needs to be differentiated between an outright purchase or a holding company relationship where it could be considered that a pound invested in distribution would be better spent than a pound invested in manufacturing.”

•FSA warning letter, p8; Interview, p17


Whitechurch Investment Services in liquidation after FSA orders review

Direct-mailing firm Whitechurch Investment Services has been placed into voluntary liquidation after the FSA insisted it offer reviews to clients who bought structured products promoted by the firm. WIS, part of the Whitechurch group, says it could neither afford to take the steps demanded by the FSA nor challenge its decision without the financial assistance […]

New sales director at Wesleyan

Wesleyan Assurance Society is appointing Ian Lazenby as its new director of sales. Lazenby was formerly UK Sales Manager at Standard Life. Regarding his appointment Ian says: “I have noticed the progress being made by the Wesleyan over a number of years. I am excited to be joining such a forward thinking and financially sound […]

Reid snub for PMI in NHS five-year plan

Health Secretary John Reid&#39s five-year plan for the NHS encourages consumer choice but there are still few incentives to contribute to PMI, according to industry experts. Reid hopes that over £90bn will go to the NHS by 2008. His plan for the private sector is for the NHS to continue to bulk-buy routine operations. Reid […]

96 per cent of intermediaries have made a decision

96 per cent of all mortgage intermediaries have made a decision on mortgage regulation, according to Birmingham Midshires Smart research index. Only 4 per cent were still unsure what they would be doing in relation to the introduction of mortgage regulation, compared with 16.4 per cent in December 2003 and 10.5 per cent in March […]


MPAA consultation

By Fiona Tait, pensions specialist The chancellor’s announcement of proposed cuts to the Money Purchase Annual Allowance means it will be more important than ever to be able to tell your PCLS from your UFPLS What was in the statement? Not much. The chancellor spared three sentences to inform us that the Money Purchase Annual Allowance will be reduced […]


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