DBS founder Ken Davy has slammed providers for creating a “multi-tie madhouse” ahead of depolarisation.
Simply Biz chairman Davy has hit out at reports that Prudential plans to take 25 per cent of Sesame and Inter-Alliance's business after depolarisation.
He says the last thing IFAs need to be told is that they will be “expected” to advise a quarter of their clients to take out a Pru policy.
But Sesame commercial director Martin Davis says the industry is under pressure like never before and the banks and supermarkets are about to seize the new multi-tie opportunity.
He predicts that only two or three multi-ties will be robust enough to operate beyond the first 12-18 months of depolarisation.
Davy says depolarisation presents a “heaven-sent” opportunity for banks to offer the impression of more choice while still selling more expensive products.
He believes networks and mega-merger firms with multi-tie plans are failing to understand the aspirations of individual advisers and that IFAs will vote with their feet and stay independent.
Davy says: “Professional standing and a significant proportion of current business is at risk just to be paid a bit more on the business which is left. For an IFA, it is the economics of the multi-tied madhouse.
“Because multi-tied adv-isers will have fewer prov-iders to deal with, they will have more time to spend with clients who are already pre-disposed to buy products offered by brand names available through the multi-tie panel.”
Multi-tie Edges, p42-43