Speaking in an RDR panel debate at the Adviser Live 2008 conference, Paterson said as a distribution channel it would not meet the needs of the mass market.
He added: “I believe that would return us to polarisation.”
But Informed Choice managing director Nick Bamford said the interim report is the most positive things that the regulator has produced in years, adding that a sales and advice split is a “perfectly viable solution”.
He said: “Consumers realise when they walk into a bank that advice is a very small part of what they’re getting. They know it’s actually a sales presentation and there is a market for that.”
Sifa managing director Ian Muirhead said the FSA’s interim report is simply an acknowledgement of a movement that is already taking place within the sector.
He believes many of the top advisers are already striving for higher qualifications and moving towards customer agreed remuneration.
He said: “The people with the motivation to have done this already don’t need any more motivation. Advisers will naturally fall into one camp or the other.”
Alpha to Omega managing director Richard Lindley said advisers now need to be looking forward and ensuring they are offering their clients an ongoing relationship.
Standard Life head of strategy Peter Jolly agreed and added that consumers will pay for quality advice as long as that relationship is present.
He said: “The people that will feel the strain haven’t built up relationships with their clients. I suspects the banks will suffer.”