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Clients to stay with IFAs after multi-ties

Almost two-thirds of UK investors seeking advice would switch to an IFA if their existing adviser were to multi-tie, according to research commissioned by Fidelity.

Sixty per cent of the 426 investors questioned by Mori last month said they would move to a new IFA if their adviser multi-tied. More than half pledged to switch to an independently owned firm if their adviser was bought by a product provider.

In a further rebuff to the FSA&#39s depolarisation plans, 53 per cent of investors said they objected to having to pay fees for advice, with 63 per cent saying they would prefer to choose whether to pay a fee or allow their adviser to take commission.

Head of IFA marketing Rob Fisher says the find-ings highlight a flaw in the FSA&#39s approach of redefining independence around IFA remuneration although he believes the proposals will expand the market for high-quality advice.

He says: “Consumers believe that independence comes from a combination of adviser competence, clear disclosure, sound business ethics and personal integrity. It does not come from how they pay to get all of those things. But by opening up the entry channels, the proposals will expand the market for high-quality advice.”

Hargreaves Lansdown director Peter Hargreaves says: “The research proves it is a load of bunkum to suggest that if an IFA ties to enough providers then consumers will not mind. But it is too early in the process to start drawing any conclusions.”

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