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B&B aims to increase fee-based business

Bradford & Bingley is aiming to increase the fee-based income from its MarketPlace and Charcol businesses to meet the FSA&#39s CP121 proposals and remain an IFA.

Under the regulator&#39s proposals for a defined-payment system, IFAs must agree a fee with clients before giving advice and B&B says it is carrying out customer res-earch to gauge willingness to pay fees.

But it admits that reducing commission and increasing turnover from fees may be difficult as only a “tiny percentage” of its life and pension business is currently fee-based. B&B says clients have not so far shown a “significant desire” to pay for advice.

It is also trying to shift the balance in its mortgage business, where 40 per cent of turnover is from fees and 60 per cent from commission.

But B&B says an alternative to going completely feebased is to split its business into IFA and authorised financial adviser.

It believes this is a feasible strategy because it has more than one brand in the market.

Group commercial director Ian Darby says: “We are carrying out a consultation but in my view it is extremely unwise to second-guess regulation. It is like trying to formulate strategy while sitting on a blancmange that is wobbling.”

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