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Broker ban in multi-tie start

IFAs, franchisees and tied agents will be excluded from setting up shop as multi-ties in the first phase of the FSA&#39s polarisation reform.

The regulator does not envisage brokers becoming multi-tied in their own right for selling stakeholder pensions and Cat-standard Isas in a paper issued last week.

Money Marketing revealed last December that franchi sees were likely to be excluded.

Direct providers will be able to link with any number of others but the FSA believes market forces will not encourage more than a few alternative products in a range.

The Treasury had announ ced multi-ties in documents accompanying the pre-Budget report, fuelling speculation that the IFA networks could convert.

FSA director of investment business (policy) David Severn says: “It will be the obligation of providers to ensure its salesforce can sell its products. We expect the number of products imported to be relatively few.”

But Aifa and Sofa have concerns over how direct salespeople will determine which of the stakeholder products in a provider&#39s range is best for the client.

The LIA questions how providers will strike deals with other companies, claiming this may not depend on suitability but on commercial factors.

Aifa director general Paul Smee says: “Direct providers are trained to sell their prov iders&#39 products. Logic would have it that they would tend to favour their own company&#39s products. The question must be asked, are these guys sufficiently competent to do what they will be doing?” As expected, the FSA paper also rem oved direct-offer promotions such as fund supermarkets from the polarisation regime. A comprehensive rev iew of polarisation is scheduled for July.

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