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…but IFAs with best advice panels beat the accusations

IFAs using best advice panels are both independent and free from commission bias, according to new research commissioned by the FSA for the polarisation review.

The report by Cap Gemini Ernst & Young last summer exonerates panels from accusations of already being multi-tied, finding selection processes to be robust, subject to regular reviews and uncorrelated with commission levels.

The survey covered 100 IFAs from 21 firms, incorporating panel and non-panel users. It says firms using panels had more structured and identifiable methodologies supporting provider selection.

It said those which did not use panels tended to use less structure and prescription in provider selection but this did not necessarily indicate a flaw in their processes.

In its cost-benefit analysis of changes to polarisation , the FSA confesses that panels may be more effective than multi-ties, with multi-tie less likely to be reviewed as often as panels.

The FSA paper says: “The evidence from the CGEY research indicates that the use of panels can be compatible with independence.”

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