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‘Dangers ahead for hybrids’

The Sunday Group believes depolarised hybrid business models for advisers are flawed and will lead to future claims against firms.

Sunday managing director Dermod Atkinson says intermediaries wearing multiple hats risk having claims laid against them in the future due to difficulties accounting for what advice has been given.

He says advisers giving independent advice through some aspects of their business while giving tied, multi-tied or whole of market to others could lead to future claims.

However, the Financial Ombudsman Service says that as long as the consumer is aware of the terms under which they receive the advice there should be little concern.

The FSA says firms must have adequate systems and controls in place to minimise their risk of claims.

Sunday managing director Dermod Atkinson says: “If an adviser wears several hats when advising different clients, in years to come it will be very difficult for them to remember exactly which hat he was wearing for which product at what time. It is a huge risk area for the future.”

But FOS spokeswoman Emma Parker says: “We do not see this as a huge area. If anything, this flags that advisers must make it absolutely clear under which basis their clients are getting the advice.”

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