The scrapping of polarisation under phase two of the FSA review could lead to a new class system for financial advice.
Clerical Medical believes axing polarisation would lead to IFAs offering multi-tied advice to the masses while independent advice would become the preserve of high-net-worth clients.
Clerical says a number of big IFAs are already discussing such moves as contingency plans from a commercial perspective if multi-ties are introduced.
Clerical Medical head of strategic marketing David Shelton says: “We have seen a number of large IFAs thinking in the same way of splitting the business to stay independent for high-net-worth clients, for whom independent advice will still be very important, and multi-tied for those who have less complex needs.”
Misys IFA Services head of marketing Andrew Bedford says: “The issue is about quality of advice, not complexity of products. We can see IFAs offering independent advice for people needing complex advice, these are usually high-net-worth clients, but then offering multi-tied advice for clients who need a minimal amount. Everyone is trying to guess the future but independent advice is important and we need to keep the debate open.”
Towry Law product services director Charles Levett-Scrivener says: “The more likely issue is one of the relationship the IFA has with the consumer.
“It depends on whether people are prepared to pay explicitly for ongoing advice and have a continuing relationship or if it will just be a transactional process.
“High-net-worth clients are likely to want a wealth management service and those who do not want to pay explicitly for it will look for execution-only transactional business.”
DBS spokeswoman Sue Lewis says: “Splitting between multi-tied and independent would not be in the consumer interest.”