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Advice is being gripped in a vice

The advice process is being put through the mangle and may never be the same again.

This year&#39s State of the IFA Nation poll demonstrates a massive jump in IFAs reluctant to offer advice not only on split-capital investment trusts but also on investment trusts as a whole.

Many advisers do not trust the sector and neither do their clients.

Pressure is also coming from PI insurers not to be involved in sales of these products, which restricts the scope of advice. Perhaps this is less of an issue when there is a lower level of investment business but when markets come back, investors may be denied access to a proven investment option.

That it is not the only concern.

Where endowments are underperf-orming, it would be best if IFAs could contact their clients and not leave them either sending good money after bad or, worse, doing nothing. But once again,the dead hand of PI insurance prevents them contacting clients for fear of soliciting a claim.

On pension transfers, the regulator is at fault for not giving a clear indication of what to do about the meltdown in some occupational pensions but after both pension and FSAVC reviews few IFAs want to touch them. Past intransigence may hamstring the regulator during the current crisis in occupational pensions and cut access to advice. Once again, the PI insurers probably also have something to say.

Time and time again, the scope of advice is being restricted, sometimes with almost immediate effect, sometimes years after the actions of this and past regulators are proven to have been mistaken.

The real fear must be that in a few years advice may be a pale imitation of itself.

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