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Advisers do not have to change business models, says Severn

IFA firms will not be obliged to change their business models as a result of the draft regulations published by the FSA in CP166, according to head of retail projects David Severn.

Severn told delegates at Money Marketing&#39s Top 100 conference last week that while companies could decide to dramatically alter their business models, there is nothing in the document which will force them to do so.

IFAs reacted with surprise to Severn&#39s comments, saying that while CP166 is a marked improvement on CP121, published last January, it will still have an effect on IFAs&#39 business models.

They say that at the very least, depolarisation will force IFA firms to offer their clients the choice of paying for advice through fees.

Severn said: “There is no requirement on any firm to change its business model.

“Every company could simply carry on doing business as it is currently but I do not think that will happen.”

Wentworth Rose managing director Philip Rose says: “I think CP166 is not the threat to IFAs&#39 businesses as CP121 was but that is not the same thing as saying there is no change on the cards. I think there is change there.”

Advisory & Brokerage Services chief executive Gareth Marr says: “IFAs will have to offer the fee option. I think that there is a bit of complacency around among IFAs who do not currently offer fees about how easy it is to do so.”

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