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Advice will still be poles apart

When talking of consumers&#39 interests, the FSA should consider the following – ll insurance and investment policies are legal contracts entered into by two parties – the provider, who devises the contract, and the client.

It is not contentious to say that anyone entering into a legal contract without first taking professional advice is being silly.

For prudent consumers,a genuinely independent adviser is the only acceptable distributor of financial products.

By tabling proposals which it acknowledges will shrink the IFA sector, the FSA threatens to defeat one of its own purposes, which is to protect the consumer.

On the subject of remuneration, if the FSA&#39s proposed regime comes into force, I shall be asking my client to “define” my remun-eration as precisely the same amount that is available to other distributors of the financial products that I arrange for him.

I would challenge the legitimacy of any regulatory diktat prohibiting such a self-evidently fair and equitable agreement. This is a matter for the OFT.

Lastly, IFAs should take heart that the “scrapping of polarisation” is no such thing. There will still be two sources of advice.

On the one hand, there will be tied or multi-tied agents who work directly for the insurance industry and are therefore “salesmen”.

On the other hand, there will be independent operators who work on behalf of their clients and thereby earn the right to be called “advisers”.

Most consumers appreciate well informed and reasoned advice, very few welcome a sales pitch. There is a world of difference – the two are poles apart.

Richard Davis

Park House Financial Services,

Tatsfield,

Surrey

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