The industry faces “overnight Armageddon” if advisers do not move from a transactional commission-based model, warns M2 Financial.
Speaking at the Money Marketing commission round table last week, managing director Mark Howard said the adviser community needs to take responsibility for its practices or the Government will lose patience and clamp down on IFAs who will then have effectively committed commercial suicide.
Howard said: “It is change or die. We are going through a huge change in this industry once again and out of all the hurdles we have gone through already in the last 20 years, this is by far is going to be the biggest.”
He said advisers need to be willing to retrain and move their business on to a ren-ewal, relationship-based model that does not rely on up-front commission through transactional sales.
Howard said: “If we do not try and control it from within the industry, Armageddon will occur because the Government will just lose patience and, bang, it is gone and then you will see the industry die overnight.
“If we can prove to the regulators that we are intelligent people who recognise that there is an issue and we can come up with ways of moving towards that ultimate goal, then I think we can have a partnership with them in delivering not the perfect scenario but something that will work for the majority of people.”