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Competition law reforms &#39have lead to less choice&#39

IFAs have accused the Gov-ernment of operating double standards over its plans to modernise competition laws.

Advisers claim that instead of creating competition, the Government&#39s reforms of the financial services sector have lead to consolidation and less consumer choice. They point to how the introduction of stakeholder has led to the merger or acquisition of sma-ller life offices and IFA firms.

According to proposals set out by Chancellor Gordon Brown this week, there will be radical reform of the UK&#39s competition regime.

The move, aimed at opening up markets, will see the removal of political control of competition decisions pas-sed to the FSA, OFT and Competition Commission in a similar way that monetary decisions went to the Bank of England at the start of the last Parliament.

Kangley Financial Plan-ning managing director Geoff Kangley says: “IFAs are champions of competition. A danger of consolidation does exist with stakeholder. The low charges are a recipe for disaster for the smaller life companies and I think the recent mergers in the industry have been driven by this, which reduces the amount of competitive companies.”

Pearson Jones director Nick Conyers says: “Market forces are not working in the way that the Government intended.”

Roger Sanders Associates principal Roger Sanders says: “Consolidation is happening as we speak with Misys and DBS, which means around that 40 per cent of the market will be loosely controlled by Misys.”


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