View more on these topics

Aifa remains unsubmissive in submission

Director general Paul Smee explains why the Association of IFAs&#39 response to the London Economics report opposes wholesale redefinition of polarisation while acknowledging the need to re-examine some aspects of the system.

I am always really annoyed when people use their editorial space to promote themselves and their businesses. So you won&#39t catch me reminding IFAs of the star-studded and reasonably priced Aifa conference on September 20. They will just have to go to the Aifa website at to find out for themselves.

No, I will stick with polarisation and I hope that you will listen carefully because I will write this only once.

Aifa has made its response to the FSA about the London Economics report on polarisation – its text can be found on our website. As with most of the respondents whose submissions I have seen, we identified some serious practical problems with the wholesale redefinition of polarisation which would work against the interests of investors and would cause massive disruption for uncertain gain.

We were especially concerned that investors would be confused by advisers who claimed to be sort of semi-independent in some sort of multi-tie.

We also suggested that the report was far too sanguine about the effects on IFAs, who could come under a lot of pressure to relinquish their independence, and we commented on the costs of change which would, after all, be ultimately carried by investors.

So we ended up supporting the retention of the essentials of polarisation while acknowledging that there are some details which do need re-examination. For example, the different SROs have different interpretations of what polarisation precisely entails and these cannot survive in a single rulebook. Thus, some adaptation is needed.

Nor can a responsible industry overlook some of the problems for those who use tied salesforces. But Aifa has indicated that these can most effectively be tackled on a case-by-case basis which leaves the structure of polarisation intact to the benefit of the investing public at large. We have even suggested some imaginative ways of addressing particular issues.

We now wait for the FSA to make its views known to the Treasury which, in the words of the Financial Services Act, must decide whether the anti-competitive effects of polarisation (identified by the Office of Fair Trading in its August 1999 report) are no greater than is necessary for the protection of investors.

Sorry to spell this out in mind-numbing detail but it is worth remembering what this is all about. This is the last time that the process will be played by these particular rules.

As Money Marketing pointed out last week, the new legislation gives the Competition Commission the task of determining whether any rule of the FSA has a “significantly adverse effect on competition” and whether that effect is justified given the FSA&#39s regulatory objectives.

Given the tortuous path down which the present examination has come, we must hope there is a decent interval before our industry is opened up to a similar investigation on polarisation or, indeed, any topic.


Alexander Forbes back on the UK acquisition trail

Independent financial risk services company Alexander Forbes is set to hit the UK acquisition trail again after securing £100m of offshore funds.The South African-based company, which acquired IFA Johnstone Douglas in April, says the move is part of its strategy to expand its presence in the UK retail client market. It expects to announce further […]

Nuki&#39s eye

It is the silly season and here I am away from it all in Italy, home of the perfect racing bike and ripe tomato.To say that life is good here is not enough. It is great. The villa is an old barn with a red-tiled roof that sits on a small mountain at the end […]

Merger spells end for Pru arm

Prudential Retail, which includes the company&#39s tied saleforce believed to number 1,500 RIs, will disappear as it merges with the Prudential Group Pensions division.The move has prompted the departure of the retail division&#39s managing director Roger Flynn. Flynn officially leaves the Pru at the end of September but Pru sources say he has already left […]

Campaign moves ABI to justify gap-filling stance

Money Marketing&#39s Poles Apart campaign has scored its first victory as the ABI issues a full explanation of why it backs gap filling while warning that multi-ties will damage consumers&#39 interests.The campaign is seeking the answers to 10 questions about why a change is needed to the polarisation regime and how change would affect IFAs […]

Budget summary – March 2016

This week’s Budget looked as if it would be a difficult one for the Chancellor, with disappointing economic numbers and the need to avoid ruffling feathers ahead of June’s in/out referendum. Nevertheless, Mr Osborne did spring a few surprises, including some tax reductions. So how does this budget affect you? If you are – or […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm