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‘Bank crisis shows virtues of IFA model’

The Northern Rock and Societe Generale debacles are further evidence that it is the bank business model and not the IFA model that is bust, says Sesame.

Speaking at a Money Marketing RDR round table, Sesame chief executive Ivan Martin said the wrong model is being accused of being broken. He said the Government must see the IFA sector as part of the solution rather than the cause of the savings crisis.

Martin said: “When the retail distribution review discussion paper first came out and you looked at it just on its merits, here we had a review of retail distribution which looked to be a disproportionate attack on the role of the professional adviser.

“The key lobbyists – my hobby-horse again, the banks – seemed to have a dispro-portionate effect on the content of the discussion paper.

“Looking in hindsight now at whether or not the model is broken and recent events at Northern Rock and SocGen, I would say there is a proportionality issue about the way the paper was structured.”

Martin said presenting advice as part of the solution to the country’s debt problems will be the only way to draw a significant numberof new people into the prof-ession. He said: “I just wish the FSA, the Government and the Treasury particularly would start looking at the advice community as being part of the solution as opposed to starting off being a part of the problem.

“We need to create an environment where the advice profession is seen with trust and confidence because, if we do not, the profession will die ultimately.”

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