IFAs are breaking the FSA’s depolarisation rules and failing to provide an adequate fee option to their customers, say the two biggest IFA bodies.Aifa and the Personal Finance Society are warning their members to ensure the fee option is embedded in their business if they want to operate under the IFA banner or risk FSA enforcement action. Personal Finance Society head of public affairs John Ellis claims that some IFAs have ignored depolarisation and are just nominally offering a fee option while relying on commission as before. Aifa director general Chris Cummings says although these firms are not deliberately passing themselves off as IFAs, many are still unaware of the FSA’s depolarisation requirements two months after they were introduced and have effectively just ticked the fee option box to retain indepen- dent status. Charging inflated fee levels or hourly rates to put off customers or presenting the fee option in an unfavourable light in discussions with clients would fall foul of FSA rules. Ellis believes the number of IFAs may drop considerably as firms fall foul of the FSA and are forced to become whole of market advisers. He says: “I have seen little evidence that depolarisation has caused IFAs to adapt their propositions. These IFAs can expect a sting around the corner. Depolarisation has muddied the picture and we could be faced with an amorphous mass of distributors in a few years time.” Cummings says: “On the whole, depolarisation has passed smoothly but there is still a lack of awareness among some firms. The FSA is looking very closely at the depth of the fee offering of newly independent firms.” An FSA spokeswoman says: “Firms have to embed the fee option in their business plan and if they do not, they are obviously not treating their customers fairly.” Pension Transfer Solutions managing director Carl Melvin says: “Advisers are making up fees as they go along and hoping the FSA does not stumble across them because they do not want to tell their customers that they are not independent any more.”
As we have all seen in the past few years, the number of multi-manager offerings available in the marketplace has grown rapidly.
Friends Provident saw total life and pensions business rise 33 per cent from 212m to 282m in the first half of 2005 but says the market is difficult to call in the run up to A day. The insurer says margins held up but business volumes in the run up and immediate aftermath of A […]
The ABI is starting an expert working group on HIV to inform the insurance industry on best practices and policy in dealing with HIV issues. It will be chaired by Professor Donald Jeffries and includes underwriters from leading reinsurers, medical consultants and pinkfinance.com editor and IFA Chris Morgan.
Leeds & Holbeck building society is launching a new five-year fixed rate shared ownership mortgage at 5.79 per cent.The offer will be available until November 1, 2010 and allows customers to borrow up to 100 per cent of their property share without a higher lending charge. The loan has an LTV of up to 75 […]
By Jamie Clark, Business Development Manager The pensions revolution is almost upon us. As with any revolution, there will be winners and losers. The winners in this case could presumably be the politicians that orchestrated pensions freedom and choice just before the general election. As for the losers, there may be many thousands of people […]
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The Financial Services Compensation Scheme has declared self-invested personal pension operators Stadia Trustees, Brooklands Trustees and Montpelier Pension Administration Services in default. The lifeboat fund has received around 150 claims for compensation relating to the three businesses. Those claims relate to how the businesses set up, operated and administered Sipps through which people invested in […]
The Department for Work and Pensions has confirmed it will not change the pensions triple lock and will explore bolstering the powers of The Pensions Regulator in the forthcoming legislative period. The DWP published its “single departmental plan” yesterday, which sets out five objectives it is working towards over the next four years. It has […]
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