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Cap Gemini warns of recreating system flaws

A consultant at the heart of the FSA&#39s polarisation rev-iew has hit out at the pla-nned regime, saying it could have significant adv-erse impact on both consumers and the industry.

Cap Gemini Ernst & Young vice-president Shaun Crawford says the proposals are in danger of recreating many of the present flaws in the system and there are significant barriers to turning the FSA&#39s ideas into reality. His firm was commissioned by the FSA as part of the polarisation review to look into IFAs&#39 use of panels.

Crawford says: “The proposals could remove commission bias from the IFA sector, the preserve of the high-net-worth client, only to recreate it in the multi-tie market. The proposals could initiate a stampede to buy IFA business reminiscent of the disastrous acquisition of estate agents in the 1980s.

“The FSA gives only limited indication on how it will close the savings gap by enabling more people to get more advice. There are major practical problems to be resolved to avoid the risk of significant adverse effects on consumers, advisers and insurers.”

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